A former UK Labour minister supported a campaign to undermine the Rudd Labor government’s proposed mining super profits tax in Australia, a document published in the latest tranche of the Epstein files reveals.
Lord Peter Mandelson, once one of British Labour’s most powerful figures, was sacked last year as the UK’s ambassador to the US over his links with the disgraced financier, rapist and human trafficker Jeffrey Epstein.
This week, Mandelson resigned from the Labour party altogether as further revelations in documents released by the US Department of Justice show the pair’s close links, even after Epstein was convicted of child sex offences.
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Mandelson is facing a possible police investigation into his alleged leak of market-sensitive information from inside the Brown government to Epstein at the height of the financial crisis.
The latest Epstein file documents also contain an email Mandelson sent to Epstein in June 2010, when Australia’s mining industry was waging a coordinated campaign against the then Rudd Labor government’s proposed 40% mining super profits tax.
At the time Mandelson had just lost his post as the UK’s first secretary of state, a position often equated to deputy prime minister, after Labour was defeated in the May general election.
Mandelson’s email – first sent to a redacted recipient on 8 June, then shared with Epstein five days later – contains a private analysis written by the then XStrata chief executive, Mick Davis, on the mining industry’s strategy to fight the tax proposal.
Mandelson exhorts the recipient of the original email: “you need to build the broadest possible coalition…” to pressure the Australian government, then led by Labor prime minister Kevin Rudd, to back down on the proposed tax.
“The pressure which the industry has applied, with the strong focus on jobs and social impact, is clearly having an effect on a government which is already under pressue.(sic)
“This pressure needs to be maintained so that everyone understands the clear consequences of the govt’s proposals.”
Mandelson said the mining companies’ campaign should avoid becoming seen as a proxy debate about government capture by powerful business interests.
“You do not want to turn it into an issue of ‘who governs Australia’, the voters and their elected representatives or the mining companies.”
Mandelson said the fundamental rationale for the mining super profits tax – allowing all Australians to benefit from the country’s resources boom – was difficult to argue against.
“There is no ideological reason why the industry should not be making a greater contribution to society, especially given the constrained economic times,” he said.
Mandelson said the Rudd government should be given the opportunity to compromise on the tax.
“The Rudd government will want to (or at least give the impression) that they are conceding from a position of strength, not weakness. I think you will want to secure a compromise before this issue is thrown into the heat of the election battle.”
It is not clear from the released documents whether Epstein had asked Mandelson for his assessment of the Australian super profits tax, or what he did with the information. Epstein died in prison in 2019.
Rudd had proposed a resources super profits tax in May 2010, which would have taxed the profits reaped by mining companies at 40%.
The measure would have generated $9bn annually, according to government forecasts.
In response, the mining industry mounted a concerted campaign to kill off, or weaken, the tax. The campaign succeeded, particularly in destabilising the Rudd government.
Julia Gillard replaced Rudd as prime minister in June 2010, less than two weeks after Mandelson emailed Epstein. She replaced the super profits tax with the significantly more modest minerals resource rent tax (MRRT). This was later repealed by the Abbott government.
The latest Epstein disclosures show Mandelson appears to have leaked a sensitive Whitehall document to Epstein, who was still under house arrest at the time, detailing the UK government’s tax plans and intention to sell £20bn in assets.
He forwarded the document in June 2009 with the comment: “Interesting note that’s gone to the PM.”
Emails had already emerged over the weekend that suggested Mandelson had received three payments of $25,000 each from Epstein when he was a backbench MP in 2003 and 2004. Others showed that his partner had received thousands of pounds in 2009 and 2010 when he was business secretary.
In response, Mandelson said in a letter to the UK Labour party on Monday: “I have been further linked this weekend to the understandable furore surrounding Jeffrey Epstein and I feel regretful and sorry about this.
“Allegations which I believe to be false that he made financial payments to me 20 years ago, and of which I have no record or recollection, need investigating by me.
“I do not wish to cause further embarrassment to the Labour party and I am therefore stepping down from membership of the party.
“I want to take this opportunity to repeat my apology to the women and girls whose voices should have been heard long before now.”
The UK prime minister, Sir Keir Starmer, said on Monday that Mandelson should lose his title and seat in the House of Lords, and launched an inquiry into his “conduct during his time as a government minister”.
The Guardian has approached Mandelson for comment about the leaking of information to Epstein.
