Lord Peter Mandelson was handed a £75,000 taxpayer-funded payout to terminate his contract as the UK’s ambassador to the US, newly released documents show.
Emails contained within an initial batch of papers relating to Lord Mandelson’s appointment showed he first requested his contract was paid out in full, totalling more than £500,000.
A member of the HR directorate within the Foreign Office appeared to praise chief people officer Mark Power in October last year for managing to “get this settlement down this low with minimal fuss”.
An email dated October 16 last year, with the subject heading “PM settlement” from Alice McCullough from the Foreign Office’s HR directorate read: “If there’s any pushback, it might be worth mentioning that he opened negotiations asking us to pay out his contract (over £500k).
“Mark did v well to get this settlement down this low with minimal fuss.”
The documents released on Wednesday show the Treasury agreed to give Lord Mandelson a £40,329.50 payment “in lieu of notice” and a “special severance payment” of £34,670.50.
Another document from the papers appeared to show Lord Mandelson’s counsel had advised him the noticed period payment was “insufficient” because the Government’s actions in removing him from the position had “permanently damaged” his employability.
Following his dismissal in September last year, an email from Lord Mandelson to Mr Power showed how he expressed concerns about leaving the US with “maximum dignity” and “minimum media intrusion”.
Chief Secretary to the Prime Minister Darren Jones told MPs Lord Mandelson’s initial request for a full contract payout was “inappropriate and unacceptable”.
The Cabinet Office minister said: “As the documents show regarding his severance payment, Peter Mandelson initially requested a sum that was substantially larger than the final payment, not just two or even three times, but more than six times the final amount.
“Despite the fact that he was withdrawn from Washington because he had lost the confidence of the Prime Minister, the Government obviously found that to be inappropriate and unacceptable.
“The settlement that was agreed was to avoid even higher further costs involving a drawn-out legal claim at the employment tribunal.”
Shadow chancellor of the Duchy of Lancaster Alex Burghart said many constituents will be “disgusted” that Lord Mandelson received a £75,000 payout.
He added: “Keir Starmer was plainly aware of the relationship between Mandelson and the world’s most notorious paedophile when he appointed him as US ambassador.
“What’s worse, the Government gave him a payoff of £75,000 despite his resignation in disgrace. No one will be able to trust the Prime Minister’s judgment again.
“The Labour Government need to come clean on what documents have been hidden from view and whether WhatsApps or private emails have been deleted or hidden.
“The Government must release the files in full and make Mandelson repay the money.”
