Labour Crisis Deepens As Mandelson Files Spark Political Uproar

It was a day of extraordinary drama in Westminster as the Labour government, led by Prime Minister Sir Keir Starmer, faced a political crisis over the release of sensitive files relating to Lord Peter Mandelson’s appointment as US ambassador. The scandal—centering on Mandelson’s relationship with disgraced financier Jeffrey Epstein—threatened not only to derail the government’s legislative agenda but also to shake the very foundations of Starmer’s leadership.

The crisis erupted on February 4, 2026, when the government was forced into a last-minute climbdown in the House of Commons. Labour whips, sensing the real possibility of a humiliating defeat at the hands of their own backbenchers, scrambled to broker a compromise. Deputy Prime Minister Angela Rayner and Treasury Committee chair Meg Hillier played pivotal roles in negotiating a deal that would grant Parliament’s Intelligence and Security Committee (ISC) veto power over the release of the so-called Mandelson files. This move stripped the executive of unilateral control and handed the ISC—a body with the highest security clearance—the authority to vet the documents before they are made public, according to the BBC and other major outlets.

The government’s initial plan had been to allow the Cabinet Secretary to decide which documents could be withheld on grounds of national security or potential harm to diplomatic relations. But this proposal sparked outrage among Labour backbenchers, who feared it would enable ministers to conceal embarrassing details under the guise of security. As one senior Labour figure put it, “This is Boris and Chris Pincher on steroids,” highlighting the depth of anger directed at Starmer’s handling of the affair.

Angela Rayner’s intervention was widely praised as “swift political judgment” that prevented a damaging public split. She insisted that only the ISC could provide the necessary independent scrutiny to maintain public confidence. “National security concerns should not be used to protect the Labour Party’s blushes,” echoed former Deputy Prime Minister Sir Oliver Dowden, reflecting cross-party unease about the government marking its own homework.

The roots of the crisis trace back to Mandelson’s controversial appointment as US ambassador in February 2025—a decision made despite his well-known friendship with Epstein, who had been convicted of child sex offences in 2008. Starmer admitted during Prime Minister’s Questions that the ongoing relationship had been flagged during the vetting process. “Mandelson betrayed our country, our Parliament and my party,” Starmer declared in the Commons. “He lied repeatedly to my team when asked about his relationship with Epstein before and during his tenure as ambassador. I regret appointing him. If I knew then what I know now, he would never have been anywhere near government.”

The situation escalated further after US Department of Justice emails, released in early February 2026, suggested Mandelson had forwarded Epstein an internal Downing Street memo in 2009 discussing possible government asset sales and had given advance notice of a €500 billion EU bailout in 2010. Emails also indicated that Epstein made three payments of $25,000 each to Mandelson in 2003 and 2004, though Mandelson has denied any recollection of the payments. He has apologized for maintaining the friendship with Epstein post-conviction, stating he believed “lies he told me and so many others.”

The fallout was immediate and severe. Mandelson was fired from his ambassadorial post in September 2025 and, facing a police probe for alleged misconduct in public office, resigned from the House of Lords and relinquished his Labour Party membership. The government began drafting legislation to strip him of his title and lifetime Privy Council membership—a rare and symbolic rebuke. Starmer told MPs he had spoken to the King about Mandelson’s removal from the Privy Council, emphasizing the gravity of the affair.

Meanwhile, the political opposition—led by Conservative leader Kemi Badenoch—seized the opportunity to maximize embarrassment for Labour. The Conservatives tabled a motion demanding the release of all documents related to Mandelson’s appointment, including communications with Starmer’s chief of staff, Morgan McSweeney. Badenoch accused the government of orchestrating a cover-up, declaring, “This is not about national security, this is about his job security.” She pressed Starmer on whether he still had full confidence in McSweeney, whom many blame for pushing Mandelson’s case. Starmer replied, “Morgan McSweeney is an essential part of my team. Of course, I have confidence.”

The debate exposed deep divisions within Labour. Several MPs, including Matt Bishop and John McDonnell, signaled their intention to rebel, citing concerns about transparency and justice for Epstein’s victims. Bishop stated, “Given the strength of feeling among victim and survivor groups, and frankly given my own conscience, I cannot in good faith support a position that risks further eroding trust in our commitment to justice.” Rayner’s call for ISC oversight was echoed by others, with Labour MP Jim McMahon describing it as “sensible.”

The pressure on Starmer intensified as prominent commentators weighed in. Broadcaster Andrew Neil suggested that firing McSweeney would not be enough to save Starmer’s premiership, while Andrew Marr declared, “We’ve entered the final stage of the Starmer premiership,” citing lost authority and direction. The government’s U-turn, while averting immediate defeat, left Starmer’s leadership on shaky ground and exposed a rift between the frontbench and party faithful.

Calls for further investigation into Mandelson’s conduct continued to mount. Nigel Farage wrote to the European Anti-Fraud Office (Olaf) urging a probe into Mandelson’s tenure as EU Trade Commissioner, alleging leaks of confidential bailout information to Epstein and potential breaches of professional secrecy. Other MPs, including Conservative Sir David Davis, raised questions about Mandelson’s relationships with other controversial figures, suggesting a pattern of questionable judgment and potential conflicts of interest.

Throughout the day, the Commons was abuzz with intense negotiations and public confrontations. The Metropolitan Police, meanwhile, requested that certain documents not be released to avoid compromising their ongoing investigation. Speaker Sir Lindsay Hoyle clarified that the police have “no jurisdiction” over the Commons, underscoring Parliament’s autonomy in deciding what to disclose.

Ultimately, MPs approved the release of the Mandelson files, with the ISC set to determine what can be made public. Downing Street confirmed, “We will comply with the motion, including publishing documents relating to Peter Mandelson’s appointment, which will show the lies he told.” The affair, however, has left lasting scars. As one commentator observed, “If voters in Labour’s traditional heartlands conclude that a party launched to champion working people is now a bastion of an incestuous and self-serving elite, they will flock to Reform UK and the Greens.”

In the end, the Mandelson scandal has not only ended one political career but may well have marked the beginning of the end for another. The trust between Starmer’s frontbench and his party base has been shaken, and the government’s ability to control the narrative has been decisively undermined.