Peter Mandelson scandal: Keir Starmer has one last chance but I doubt he'll survive

By the autumn of 2009, thoughts were turning urgently to the following year’s general election. Darling found his own fiscal plans frustrated at every turn. In the Budget, he pulled one rabbit from the hat – a tax on bankers’ bonuses which was a scandal untouched by the suffering of others.

Darling made the announcement without warning “since this is an industry filled with experts at cunning tax avoidance schemes”. The tax eventually brought in £3 billion to support public services. The bankers were furious and Darling started to receive “frantic calls from No 10 officials who were clearly being lobbied by senior bankers”.

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I felt physically sick

In the run-up to Christmas, there was “a crescendo of complaints; the most voluble came from Jamie Dimon, chief executive of JP Morgan Chase” who was “angry, very angry”. He told Darling that “they were thinking of building a new office in London but they had to reconsider that now”. Darling wrote: “I guessed correctly that they would postpone their decision until after the general election. That they did.”

It is a well-told anecdote in the book and, for me, it goes to the core of Peter Mandelson’s treachery. For it was Mandelson who, from within the heart of government and trust, told Jeffrey Epstein that Dimon should make a “mildly threatening” call to Darling in an effort to secure reversal of a policy which the government Mandelson was part of was desperately seeking to defend.

I am sure Mandelson did much worse things through his relationship with Epstein but for me, this one example made me feel physically sick. The pressure on our friend, Darling, through that period was immense, from more than one direction. The last thing he needed were angry, threatening phone calls from the world’s most powerful banker.

READ MORE: Keir Starmer should never have considered Mandelson for job, says Anas Sarwar

Yet the man who seemingly instigated these calls was in the same room, at the same table, supposedly working for the same government. That should be beyond belief but the evidence says otherwise.

Other actions – like allegedly forwarding market-sensitive information to Epstein within seconds of it being shared with him – may carry more legal jeopardy for Mandelson. I certainly hope so. But such personal betrayal seems even worse.

And for what? There would have been no crude exchange of money for information, even if instant fortunes were made off the back of this uniquely well-placed inside track. There were more subtle ways to profit from being in Epstein’s thrall.

But just as important to Mandelson, I guess, would have been the proof he could offer to his wealthy friends that, once again, he was “in the room” where big decisions were made. Vanity more than venality has long been at the roots of Mandelson’s downfall.

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An underwhelming assurance

Keir Starmer told the House of Commons this week that “had I known then what I know now, I'd have never appointed him”. This seemed a somewhat underwhelming assurance since nobody in their right mind would appoint Mandelson to anything if they had known what we all know now. The relevant question is whether Starmer should have known enough to stop him making the Washington appointment – and if not, why not?

At the time of Mandelson’s removal from Washington, I wrote here that there had been good arguments in favour of the appointment in the peculiar circumstances created by the Trump White House. If Mandelson was better placed to exert influence for the UK on tariffs and myriad other issues, then why not? That was working pretty well until the earlier Epstein revelations made his position untenable.

The other side of the argument always lay in Mandelson’s history. I wrote then that when the ambassador option arose, Mandelson “should have been firmly dissuaded from the idea, in his own interest. I didn’t know how the accident would happen but I was never going to be surprised when it did. Neither, I suspect, would anyone of my political generation”.

Now we are beginning to appreciate the full scale of “the accident” and it is apparent that, far from being dissuaded in the interests of self-preservation, Mandelson lied his way ruthlessly into the job, reckless in his own interest and – much more important – utterly dismissive of the risk to those he was deceiving, notably Starmer.

Bad advice and self-inflicted wounds

However, that does not address the disclosure by Starmer himself that he knew of Mandelson’s continuing contact with Epstein after his 2008 conviction. On top of all the other amber warnings about the risks inherent in appointing him as ambassador, it is difficult to see why this one did not finally tip the scales towards discretion rather than valour. Where was the alternative advice coming from?

I doubt if Starmer can recover from this and, as more of the background comes out and the political roast has scarcely started dripping, I would shed no tears if he recognised that now, even if it meant a leadership contest sooner rather than later. To adapt an old adage, things can hardly get worse and every bit of good the Labour government is doing is lost in the procession of self-inflicted wounds.

Starmer has certainly been let down by Mandelson and is rightly very angry about it. But from the outset of his premiership, he has been lamentably failed by those who were giving him political advice. His last hope of survival may lie in clearing out that stable, for the quality of their advice certainly isn’t going to get better.