Latest release of Mandelson files reveals Work and Pensions Secretary’s frustrations over welfare
Daily Telegraph 01/06/26
Labour cares only about who it can tax in order to pay more in benefits, a senior Cabinet minister complained to Lord Mandelson.
Pat McFadden, Sir Keir Starmer’s enforcer in Cabinet at the time, told the disgraced peer that every meeting he had with members of the Parliamentary Labour Party concerned the question: “Who can we tax in order to pay benefits to others?”
The comments were seized on by the Conservatives, who branded Labour “the welfare party”.
The frank exchange emerged on Monday as part of the Government’s release of more than 1,500 pages of emails and WhatsApp messages relating to Lord Mandelson’s time as the UK’s ambassador to the US.
The document release – the largest laid before Parliament since the 2016 Chilcot Inquiry – was demanded by MPs in the wake of Lord Mandelson’s sacking and fresh revelations about his friendship with the convicted paedophile Jeffrey Epstein.
The damning emails and texts paint a picture of a Government at war with itself, led by a Prime Minister lacking the flair to tackle the challenges facing Britain.
In the documents, the disgraced peer said the Prime Minister lacked “verve” and “panache”.
He also accused Gordon Brown of “having it in” for Sir Keir, and claimed the former Labour leader was using Angela Rayner, the ex-deputy prime minister, as an “instrument of destabilisation” within the Government.
Messages released on Monday paint a picture of Lord Mandelson being in close contact with Morgan McSweeney, Sir Keir’s former chief of staff, although much of their communication is missing.
However, their close relationship does not spare Mr McSweeney from Lord Mandelson’s ire, and he and his team are accused of being like the Keystone Cops – a reference to a slapstick comedy about hapless police officers.
Lord Mandelson also plotted with a senior mandarin to sideline Jonathan Reynolds, the former business secretary, and mocked the dysfunctional nature of the Goverment with Torsten Bell, the mastermind of Rachel Reeves’ autumn Budget.
Mr Bell, the pensions minister, described the Government as “messy”, prompting Lord Mandelson to reply that it “doesn’t do policy ... well enough”. The peer went on to describe the revolving door of ministers as “rubbish in, rubbish out”.
In one of the most explosive messages, sent in the days following local election losses last May, Lord Mandelson said the mood in the Labour Party was “mutinous”.
Mr McFadden agreed, saying: “Every meeting I have is: ‘Who can we tax in order to pay benefits to others?’ They’re asking the wrong questions.”
The comments have echoes of the note written by Liam Byrne, the outgoing chief secretary to the Treasury under Gordon Brown, in 2010.
The “joke” note said: “I’m afraid there is no money.” It was for David Cameron’s incoming Conservative-led government, which used it to depict Labour as having wasted taxpayers’ money.
Within minutes of the documents’ release on Monday, the Conservatives used Mr McFadden’s comments in a social media attack advertisement.
Kemi Badenoch, the Tory leader, claimed the remarks showed that Labour was now “the welfare party”.
The explosive exchanges between Lord Mandelson and Mr McFadden occurred in the weeks before a major Government climbdown over welfare cuts.
Last July, No 10 backed down on £5bn of cuts to personal independence payments. The climbdown is regarded as the moment Sir Keir ceded power to the soft Left of the parliamentary Labour Party.
Mr McFadden is now the Work and Pensions Secretary, in charge of Britain’s ballooning welfare bill.
His friendship with Lord Mandelson dates back to the New Labour government of Tony Blair and Mr Brown. In 2008, Mr McFadden was a business minister in Mr Brown’s government at the same time Lord Mandelson was business secretary.
Mr Brown brought Lord Mandelson back into Cabinet in October 2008, seven years after he had been forced to resign from Sir Tony’s government over claims that he had lobbied it to fast-track passports for two Indian tycoons.
Last month, the King’s Speech, which detailed Sir Keir’s planned legislation for the next parliamentary session, did not include any welfare reforms. Sir Tony has called the welfare bill – set to rise by £74bn in the next four years to reach £406bn by the end of the decade – “unsustainable”.
A spokesman for Mr McFadden said: “Pat has said publicly many times that the question we should ask is not what are you entitled to, but how can we change your life?
“That has been his whole approach as Work and Pensions Secretary – focusing on how we best spread work and opportunities to young people in particular, rather than writing them off as the previous government did.
“Pat has fully complied with the Humble Address and handed over all messages. His only contact with Peter Mandelson since he left government has been to urge him to think about the victims in all this and apologise to them.”
In another message, sent in the wake of the disastrous local election results, Lord Mandelson told Mr McFadden that Sir Keir “lacks verve”.
He wrote that Labour’s problems “stem from the top” and from the Prime Minister’s failure to prioritise economic growth.
“It stems from the top and Keir lacks verve as does the Cabinet as a whole,” he wrote. “People’s heads are broadly in the right place but you need more people who can execute.
“The government needs visibly and tangibly to embrace Knowledge and Risk on everything that will help grow the economy.”
The peer went on to say to say that the Government lacked “panache”, adding: “The problem is the government doesn’t give a sense of crusading to turn round and change Britain.
“That’s what I mean by panache, verve. It does start right from the top, I am afraid, but you must all contribute more to it by breaking out of the Whitehall system and mould and appearing less like business-as-usual conventional ministers and, dare I say it, behaving in a more Trumpian risk-taking and daredevil way.
“At the moment, ministers seem to be looking more to the Whitehall machine and the party base than to the public who are crying out for leadership.”
Mr McFadden agreed, saying that the Government appeared “tone deaf” and a “bit robotic”.
Lord Mandelson was also critical of Mr McSweeney, telling Mr McFadden that he had complained that he might not get a place in the Oval Office when the Prime Minister met Mr Trump in the White House.
“We have a whole lot of No 10 keystone cops coming, including Morgan, falling over themselves and complaining they won’t all be in the Oval (none of us will be),” he said.
The peer accused Sir Keir of changing his policy positions too often, and said his team believed he did not “know what he wants”.
“I went in to No 10 after I saw you,” he told Mr McFadden. “It is beleaguered and bereft. It requires complete revamp and infusion of purpose and confidence to get anywhere.”
The peer said that senior figures in Downing Street did not “work as a team”, adding: “They are not led and none of them really know what Keir thinks or wants. In fact, most of them don’t think Keir knows what he wants.”
Mr McFadden, seen as one of the Prime Minister’s most loyal lieutenants, suggested Sir Keir kept changing his mind on strategy by going for “direction A” but then turning to “direction B”.
Lord Mandelson said: “I have a feeling that Keir is now consistently going for direction B. His recanting on his immigration speech, on welfare, now Gaza. There is definitely a ‘let Keir be Keir’ trend.
“This is what Morgan senses, and so it is particularly acute for him. His view from when Keir first stood is that the cycle has been the same, advance/buckle/advance/buckle.”
The peer accused Sir Keir of dodging the media and avoiding all risks. Talking about the Prime Minister’s Washington visit, he said Downing Street wanted to avoid him having any encounters with journalists.
“The media prep is interesting,” he told Mr McFadden. “Completely reductionist for Keir. Want to avoid any encounter with journos that might involve him answering a question. No sense of opportunity for personal projection. Just avoid all risk. Always the same.”
Lord Mandelson was equally frank with Mr Bell as the two criticised the Government’s dysfunctional approach.
In an exchange last July, Mr Bell told the peer that “the big picture is... messy”.
When Lord Mandelson told him it was “messy because the government doesn’t do policy … well enough,” the Treasury minister replied: “Well that is definitely true”.
Mr Bell went on: “Everyone seems to think it’s someone else’s job to get the policy right... which is very odd.”
Lord Mandelson replied: “As the saying goes, rubbish in rubbish out.”
The documents reveal that the peer, known as an architect of the New Labour project, advised Sir Keir on strategy during the 2024 general election campaign.
He warned him that voters “don’t know what to expect from Labour” and were worried the party would not be “true to their word”.
On June 27, a week before the election, Lord Mandelson texted Sir Keir after campaigning in Bury, Lancashire, telling the Labour leader that voters had responded positively to him criticising Rishi Sunak for emphasising the points of difference between people.
The peer texted: “We have a lot of challenges in our country and also a lot going for us so let’s focus on what unites us and what we can do better together. This is a good last week message.”
Sir Keir replied the next day: “Thanks Peter... how did Bury seem to you?
Lord Mandelson replied: “Bury was fine at one level.. but while they feel Labour is safe to vote for – and many will – they feel they don’t know what to expect from Labour and therefore they are vulnerable to uncertainty messages – ‘if I vote Labour supposing they are not true to their word or fail to find the right policies (over tax and migrants)?’”
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