Sir Keir Starmer has come under fire from Labor amid renewed leadership speculation amid the fallout from the Jeffrey Epstein scandal and his decision to appoint Lord Peter Mandelson as Britain’s US ambassador.
The prime minister acknowledged on Wednesday that he had chosen Mandelson last year, despite authorities telling him that the peer had maintained an ongoing relationship with Epstein after the financier was jailed for child prostitution offences.
Starmer was also forced to back down under Labor pressure led by former Deputy Prime Minister Angela Rayner, in what some MPs saw as an attempt to “cover up” documents relating to Mandelson’s appointment as ambassador to Washington.
The affair was described by one Labor MP as “the beginning of the end” for Starmer and the mood in Westminster was toxic.
In a sign of investor unease over growing political turmoil, Britain’s borrowing costs rose to their highest level since November on Thursday, with the yield on 10-year gilts rising 0.02 percentage points to 4.58 percent.
Starmer and Chancellor Rachel Reeves are considered by bond investors to be more committed to the government’s fiscal rules than other senior Labor figures.
One former minister said there was a “mood for blood”, while others saw Monday’s events as a sobering indictment of Starmer’s decisions and political conduct.
Morgan McSweeney, Starmer’s chief of staff who promoted Mandelson’s bid to become ambassador, could soon be removed by the prime minister, a minister said. “I think he has to present Morgan as a sacrificial lamb,” he said.
Rainer became the focus of the latest round of Labor leadership speculation. “Angela is clearly enjoying inserting the knife,” said a senior labor official. “She has set up shop in the tea room, which suggests she thinks it could be the one.”
The House of Commons Tea Room is the traditional scene of political intrigue. However, a colleague of Rainer’s said: “Angela had chicken and chips in the tea room for lunch – no problem.”
Nevertheless, Rayner’s intervention in the Commons, calling on Starmer to be more open in the way he releases documents relating to Mandelson’s appointment as ambassador, came after the parliamentary Labor Party was on the brink of rebellion.
Starmer had said that documents related to Mandelson sought by the Conservatives would be released as long as they did not breach national security or harm Britain’s international relations. Cabinet Secretary Sir Chris Wormald was to be the arbiter of these trials.
But as Starmer faced the prospect of defeat in a Commons vote on the issue, he made a last concession to Labor rebels and accepted Rayner’s proposal that the release of the documents be monitored by Parliament’s cross-party Intelligence and Security Committee.
“Why didn’t we go straight to ISC?” said one Labor frontbencher. Another said: “On days like these you can see parliamentary proceedings breaking down.”
At Prime Minister’s Questions in the Commons, Starmer was accused by Tory leader Kemi Badenoch of choosing to “inject the venom of Peter Mandelson into her government” by sending her colleague to Washington in February last year.
Badenoch demanded to know whether “the official security investigation contained any mention of Mandelson’s ongoing relationship with pedophile Jeffrey Epstein”, to which Starmer replied: “Yes, it did.”
But Starmer insisted that Mandelson “lied repeatedly” about the depth and extent of the relationship. Starmer’s aides later clarified that the information had emerged in a Cabinet Office “due diligence” investigation.
The FT revealed in 2023 that Mandelson had stayed at Epstein’s Manhattan townhouse in 2009 while the financier was in prison.
Badenoch said: “The political decision to appoint Epstein’s close associate Peter Mandelson as Britain’s ambassador to Washington goes to the heart of this Prime Minister’s decision.”
A Tory official said: “Starmer is no longer in control – Kemmy is making the decisions.”
Starmer insisted he wanted to be “transparent” in releasing documents relating to Mandelson’s appointment as ambassador and his tenure in Washington, but he was heckled by opposition MPs in the Commons when he said there would be obstacles to doing so.
He said documents deemed sensitive to national security or “damaging” to Britain’s trade and security relations with the US and other third countries would not be released.
Starmer also revealed that the Metropolitan Police, who are investigating Mandelson over allegations of misconduct in public office, had told Number 10 to be careful about releasing documents that “could adversely affect their investigation”.
That statement, confirmed by the Met on Wednesday evening, halted Starmer’s plans to release some information related to Mandelson’s investigation when Mandelson was appointed ambassador.
It was a blow to Number 10 as Starmer’s aides said the documents would have “put us in a good light” and confirmed the Prime Minister’s claim that Mandelson had misled him about the depth and extent of his relationship with Epstein.
Aides to the Prime Minister said that Badenoch was being “grossly irresponsible” by demanding the release of large numbers of documents that could undermine national security and Britain’s relations with other countries.
A Conservative parliamentary motion – based on a mysterious device called “a polite address” – called for the release of emails and other exchanges between Mandelson and ministers, officials and special advisers in Washington before and after his appointment.
But the motion was not voted on after Starmer made his concession on the Intelligence and Security Committee.
MPs instead supported Starmer’s plan to give the committee oversight of documents about Mandelson.
A government spokesperson said it would “publish documents relating to the appointment of Peter Mandelson, which will show the lies he has told”.
Starmer tried to reassure his MPs that he understood the seriousness of the allegations, saying: “Mandelson betrayed our country, our Parliament and my party.”
Additional reporting by Ian Smith in London
