‘Labour must pay the money back!’ MP furious over Mandelson’s £75k sev | Politics | News
Peter Mandelson’s £75 salary angers MPs like Alicia Kearns (Image: .)
An MP has claimed the payment of a controversial £75,000 severance package to disgraced colleague Peter Mandelson broke Treasury rules.
Mandelson, a former Labor MP and Cabinet minister, was sacked as Britain’s ambassador to the US on September 11, 2025, following the release of leaked emails showing his ongoing friendship with billionaire pedophile Jeffrey Epstein.
Sir Keir Starmer and the Government are under increasing pressure to reveal how much they knew about the 72-year-old’s ongoing relationship with Epstein and why he was appointed to such a high-profile role.
The “Mandelson files” released last week showed the former ambassador sought a £500,000 payment after he was fired, but MPs have now received the £75,000 he wants back. Mandelson is also the subject of an ongoing police investigation, but no charges have been brought
Among the document packages announced regarding Mandleson’s appointment, a “Special Severance Pay Cases Proforma” was sent from the Ministry of Foreign Affairs to the Treasury on September 30, 2025, discussing his return.
“Given the reputational impact of HMG (Her Majesty’s Government), a modest solution as suggested is the proposed course of action,” he says.
However, in what appears to be a direct contradiction, the Treasury’s own guidance ignores “reputational damage” as a reason for making such a payment.
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Under the heading “Use of Special Severance Payments,” it states in black and white: “Ministries should not use special severance payments as an easy alternative to appropriate management action, for example, to avoid difficult decisions, disciplinary processes, unwelcome publicity, or damage to reputation.”
In a House of Commons debate on Monday, Conservative MP for Rutland and Stamford Alicia Kearns highlighted the Treasury’s guidance and said “the British people are forced to pay even though Treasury rules say severance payments cannot be used”.
Asked whether he thought “no rules were broken in Mandelson’s return”, Sir Keir Starmer’s Principal Secretary Darren Jones MP told the House of Representatives: “The documents relating to severance pay were released in a package last week and they speak for themselves.”
Ms Kearns told the Daily Express: “The government has been caught red-handed flouting Treasury rules. It’s common sense not to pay severance pay to someone dismissed for gross misconduct.”
“But not only did Starmer pay him, his own papers reveal this was an attempt to salvage Labour’s reputation. Treasury rules clearly prohibit this; it must be repaid even if the money came from Labor coffers.”
A Treasury source said the issue had been “politicised” and that the severance pay guidance also included grounds for payment, including potential greater future financial losses due to legal action. They said the severance package potentially saved hundreds of thousands of pounds in potential legal fees.
They added that HMT “may ignore irrelevant factors such as embarrassment” and that the severance pay decision “is based on cost control and appropriate process.”
