A general election was on the horizon and Peter Mandelson was everywhere. “He didn’t have a desk but he would dip in and out on big issues; he was always there for advice,” recalled a former Labour official of the party’s run-up to the campaign in 2024.
“He would be in and out of the Loto [leader of the opposition] office in Westminster, picking people off individually, ‘We need to chat and do this’, sort of thing.”
The Labour peer’s presence was welcomed by some, who found it reassuring to have a member of the election-winning New Labour team around, but others were notably seeking to keep a distance.
“Sue didn’t want him near anything,” said the source of Sue Gray, who was then Keir Starmer’s chief of staff and for six years before that was head of the Cabinet Office’s ethics and propriety team. “She kept trying to push him away. I think by that point, he was definitely, like, pestering for a role and wanting a role. She could probably see that all of this would happen.”
This week the prime minister, whose hands appeared to be shaking at the Commons dispatch box, apologised for “having believed Mandelson’s lies” over his relationship with the sex offender and disgraced financier Jeffrey Epstein.
Emails within a cache of 3m documents released by the US Department of Justice, suggesting that Mandelson had passed on market sensitive documents to Epstein at the height of the financial crisis, prompted Starmer to claim that Mandelson had “betrayed our country”.
During the vetting process before his appointment last year as Britain’s ambassador in Washington, he was said to have portrayed Epstein, who killed himself in his cell in 2019, as “someone he barely knew”.
The problem for Starmer, as the anger of his MPs attests, is that Mandelson was someone he and his acolytes, specifically his chief of staff, Morgan McSweeney, knew very well.
Twice forced to resign from a Labour cabinet after getting too close to the wealthy and powerful, and known to have had a relationship with Epstein – even to have stayed in his home – after his conviction for soliciting a child for prostitution, there was baggage galore.
The question debated in parliament this week was how Starmer could possibly have thought it was appropriate for Mandelson to be appointed as US ambassador. The one raised by Labour insiders is why he was brought back into the party fold at all by the prime minister, who supporters claim was never fully trusting of his character.
Mandelson was clearly not involved in the party under the leadership of Jeremy Corbyn, whom he so keenly sought to unseat, but neither did he have a role in Ed Miliband’s team. “All of us believe in dignity in retirement,” Miliband said in 2010, on being asked about a possible return of Mandelson. Why did Starmer not think the same?
Many point to the relationship between Mandelson and McSweeney – they were introduced by the peer Roger Liddle, who lives near McSweeney in Lambeth. However, their politics clash, as one former minister laid out.
“The adviser who wants to prioritise combating immigration inspired by the strongest protagonist of EU membership and free movement? The man who was the arch-pro-European for a Labour generation mentoring the man who wanted Labour to embrace the Brexit zeitgeist?
“Morgan trying to bring Labour back to doorstep bread-and-butter issues and rejecting the progressive internationalism of New Labour, hitching his wagon to the architect of it? Peter the most eloquent exponent of the need to embrace and celebrate globalisation, Morgan the man whose politics begins by rejecting that entire approach?”
So what brought this about? The answer – according to Labour insiders, officials, bag carriers and leading ministerial lights – is that Mandelson was adept at inveigling his way back, but also that it would not have been possible without a desperation at the heart of the Starmer project: they wanted to win and didn’t know how.
Simon Fletcher worked as a senior adviser for Miliband, Corbyn and then Starmer, and resigned in 2021. He was still working with Starmer on Sunday 15 February that year, when he read in the Sunday Times that Starmer was taking advice from “the man dubbed the Prince of Darkness”.
Fletcher messaged the senior leadership team on a WhatsApp group, asking if the report was true. He did not receive a reply. He raised it again at a team meeting the next day and was told that the story had clearly come from Mandelson. It was to Fletcher’s mind a dismissive non-response.
He raised it again a few days later and received a response from Chris Ward, then a senior adviser to Starmer and today a Cabinet Office minister. “On Mandelson – this is just him being him,” Ward wrote. “He obvs hasn’t been brought to advise – but offers it and is helpful when asked.”
One telling anecdote in Get In by Patrick Maguire and Gabriel Pogrund has Mandelson writing a lengthy note to Starmer in 2023 on the need for a detailed vision. A tracksuit-wearing Starmer turned up at Mandelson’s home in Regent’s Park to hear more.
Fletcher said: “I think they brought Mandelson in because it would provide a frisson from the association with Blair-era New Labour. They knew it would be received badly in many parts of the Labour movement but they would think that was a net positive – it would build on the conflict over suspending Jeremy Corbyn to show they were prepared to embrace the previously unthinkable.
“Mandelson brings with him a clear political analysis, however wrong, whereas the leadership lacked one. So it is a conscious choice to head down a very specific political road.”
For some Labour MPs, the first they knew that Mandelson was firmly back in the fold was when he turned up at a business reception in 2024 held at The Oval. That also appeared to some to be part of the explanation for his return. At a time when Labour was desperate for funds, Mandelson appeared to have a hotline to industry, said a source.
Labour Together, the thinktank and fundraising outfit formerly run by Josh Simons, now a junior Labour minister, raised and donated many hundreds of thousands of pounds to individual Labour candidates in 2024. Simons was said to be in regular contact with Mandelson.
There was genuine anger in Westminster at the Mandelson revelations this week, but a host of other motivating factors were in play, said a source.
There were those ambitious for their own careers, who believe the prime minister lacks vision, but who now felt tainted by their association with Mandelson, one Labour insider said.
The health secretary, Wes Streeting, was part of a group who would have Sunday suppers with Mandelson and McSweeney among others, and whose partner was an adviser to Mandelson in the early 2000s. Streeting had to publicly defriend Mandelson in a broadcast round.
There are also figures on the left, such as John McDonnell, the former shadow chancellor, to whom Mandelson is the epitome of all that is wrong with Starmer’s leadership and its rightward shift. McDonnell has called for Starmer to go.
Then there is the bulk of the party, which sees the Mandelson saga as proof of the “uselessness” of the leadership, as one MP put it.
One noted that it had taken a Starmer loyalist, Derek Twigg, the MP for Widnes and Halewood, to have a word with the party whips to ensure that they did not press ahead with a piece of legislation that could have blocked the publication of documents relating to Mandelson’s appointment as ambassador.
For all of those groups, said one party source, an underlying source of dismay was the realisation that Mandelson had been brought in because Starmer “doesn’t have any answers and clarity” – and Mandelson did, even if wrong. “Basically,” the source added, “they were beguiled by him”.
