Lord Peter Mandelson has resigned from the Labour Party following revelations that he leaked sensitive government tax plans and bailout information to convicted sex offender Jeffrey Epstein, in what ranks among the most serious breaches of ministerial confidentiality in recent British political history.
The disclosure, emerging from newly released Epstein files, shows that Mandelson, whilst serving as business secretary in Gordon Brown's government, shared advance notice of a €500 billion eurozone bailout with Epstein, according to the Financial Times. He also attempted to influence Treasury policy on banker bonuses, advising Epstein that Jamie Dimon, chief executive of JP Morgan, should contact Chancellor Alistair Darling to "mildly threaten" the government over its proposed supertax.
"Yes and mildly threaten," Mandelson wrote in one message, when Epstein enquired whether Dimon should intervene on the bonus tax. In another, he told Epstein he was "trying hard to amend" the Treasury's position, though the department was "digging in."
As they say in Westminster, "the constitution is what happens"—precedent matters more than law. This affair represents a profound violation of the unwritten rules governing ministerial conduct, the sort of breach that in an earlier era might have triggered resignations up the chain of command.
The communications, which took place between 2009 and 2011, reveal Mandelson was simultaneously serving in government whilst cultivating what he described as a "discreet Global Counsel project" with JP Morgan. On Christmas Day 2010, he messaged Epstein about establishing a consulting arrangement, expressing interest in acquiring knowledge to "participate in real deals."
In an extraordinary development, Prime Minister Keir Starmer called for the House of Lords to strip Mandelson of his peerage, a step that would be virtually unprecedented in modern British politics. "This is not about political disagreement," Starmer said. "This is about the fundamental integrity of government and protecting confidential information that affects markets and public finances."
The scandal threatens to overshadow Starmer's government at a delicate moment, as Labour navigates post-Brexit economic challenges and attempts to rebuild relationships with European partners. That a senior Labour figure was sharing eurozone crisis information with a private financier raises questions about what else may have been disclosed during those turbulent years.
Mandelson, who resigned from the party citing a desire to avoid "further embarrassment," has not disputed the authenticity of the communications. The 50% levy on banker bonuses exceeding £25,000 that he sought to soften ultimately did proceed, collecting over £2 billion from the banking sector during the post-financial crisis period.
Former Prime Minister Gordon Brown has demanded a full inquiry into the leaks, raising the prospect of a wider investigation into whether other ministers shared confidential information during that period. Parliamentary sources suggest the matter may be referred to the Commons Standards Committee, though Mandelson's resignation from the party complicates any disciplinary proceedings.
The affair echoes past Westminster scandals where the boundaries between public service and private interest became fatally blurred, from Jonathan Aitken's fall to Liam Fox's Atlantic Bridge entanglement. But the involvement of Epstein, whose crimes were known to Westminster insiders even before his 2019 death in custody, adds a particularly toxic dimension.
SNP leader John Swinney has reported Mandelson to police over the revelations, whilst Conservative backbenchers have called for a criminal investigation into potential Official Secrets Act violations. Whether prosecutors will pursue charges remains unclear, but the political damage to Labour is already substantial.
As Britain grapples with economic uncertainty and attempts to redefine its role in Europe, the spectacle of a senior minister sharing state secrets with a convicted criminal serves as an uncomfortable reminder of how institutional safeguards can fail when personal ambition eclipses public duty.
