The arrest of Peter Mandelson on suspicion of misconduct in public office in connection with the Epstein affair has left Keir Starmer’s Labour government reeling. It came just days after the detention—on the same grounds—of Andrew Mountbatten-Windsor, formerly Prince Andrew and brother of King Charles.

Mandelson, one of the principal architects of Tony Blair’s right-wing New Labour project, was arrested by Metropolitan Police officers at his luxurious home in London’s Regent’s Park Monday afternoon. He was questioned for nine hours at a police station and then released on bail pending further investigation. The Met had already searched two properties associated with the former peer as part of its investigation.

Mandelson’s arrest comes on the eve of Thursday’s Gorton and Denton by-election in Manchester; a seat Labour has held continuously since 1935 but is expected to lose amid a worsening cost-of living crisis to Reform UK or the Green Party. A loss is almost certain to prompt demands from Labour MPs and Starmer’s former backers in the right-wing media for him to stand down as a political liability. Having served less than two years of a scheduled five-year term, Starmer is the most unpopular prime minister of the modern era with his approval rating collapsed to a record -50 percent. Among those aged 18-24 only 13 percent have a favourable opinion of Starmer.

The arrest follows the release by the US Department of Justice (DoJ) of a further tranche of documents in January from the case of the child sex trafficker Jeffrey Epstein.  They revealed that Mandelson—then business secretary in the government of Gordon Brown—shared with Epstein information on a €500 billion Eurozone bailout package, a £20 billion UK government asset sale plan, and possible tax measures, including a levy on bankers’ bonuses. Further documents indicate financial transfers of tens of thousands of pounds from Epstein to Mandelson and to his partner.

According to a February 5 assessment by Politico, Mandelson’s name appears in “6,000-odd” Epstein files released by US authorities. This is based on the release of approximately 3.5 million pages so far by the US Department of Justice. Another 2.5 million Epstein file pages are still unreleased. With Mandelson and Andrew Mountbatten-Windsor already deeply implicated, there could yet be more damaging revelations involving others in ruling circles—including the Royal family and the Labour hierarchy.

Following the release of the January files, Mandelson resigned from the Labour Party and stood down from the House of Lords. Starmer appointed him as US ambassador in December 2024, fully aware of his intimate connections with Epstein. A previous batch of released documents forced the prime minister to sack Mandelson last September, less than a year after appointing him.

The government is desperately seeking to manage the fallout, working with the Intelligence and Security Committee (ISC) in Parliament to prevent the publication of whatever it can surrounding Mandelson’s appointment—under the guise of protecting “national security”.

However, hours after Mandelson’s arrest, the government was forced to back an opposition Liberal Democrat motion demanding the release of “all papers relating to the creation of the role of Special Representative for Trade and Investment and Andrew Mountbatten-Windsor’s appointment to that role”. It also requests “minutes of meetings and electronic communications regarding the due diligence and vetting”. With reporting that Mandelson—in the early years of the Blair government—pushed for Mountbatten-Windsor’s appointment as a trade envoy, the motion also demanded the publication of any correspondence from Mandelson relating to the appointment of the former prince in 2001.

The government said it would sanction the release of files on Mountbatten-Windsor, but Labour Trade Minister Chris Bryant told MPs that no files that could prejudice the ongoing police investigation into him will be considered for publication until it has concluded. No timescale was given for this.

According to the Financial Times, the first tranche of tens of thousands of UK documents relating to Mandelson and his appointment as US ambassador “will be published in early March”, with the government braced for major fallout.

What is contained in the Mountbatten-Windsor documents could well be even more politically explosive, given that the period covered is the last two-and-a-half decades. His appointment implicates the Blair and Brown administrations in elevating a senior royal—now under criminal investigation—into a role that facilitated direct engagement with the world’s corporate elites.

Mountbatten-Windsor’s tenure as trade envoy (2001-2011) spanned six years during the 1997–2007 Blair government and the entirety of the premiership of his successor as Labour prime minister, Gordon Brown (2007 to 2010). It was during 2009–2010 that Mandelson, as exposed in the Epstein files, allegedly transmitted to Epstein the confidential material, including Treasury-level sensitive information.

The files revealed that Epstein, as a representative of the billionaire oligarchy, did not back Brown after he took over from Blair in 2007 and wanted him replaced by someone on Labour’s openly Blairite wing. Mandelson and Epstein plotted such an outcome.

It is unknown to what extent Andrew Mountbatten-Windsor’s downfall will impact a Royal family facing a succession in the not-too-distant future. King Charles III is 78 and is battling cancer. He knew of his brother’s activities and kept silent while his late mother, Queen Elizabeth II, worked to protect him and then tried to shunt him into a comfortable retirement last year.

In an attempt to keep the situation from getting out of control, Parliament Speaker Sir Lindsay Hoyle, a former Labour MP, introduced Tuesday’s Liberal Democrat motion by warning MPs, “Of course, any comments on the king or the heir apparent would not be in order.”

The Times noted that Hoyle was recalling Erskine May, the manual of parliament first published in 1844, which states, “Reflections must not be cast in debate upon the conduct of the sovereign, the heir to the throne, or other members of the royal family.” 

Mandelson’s career epitomised the transformation of the Labour Party into a naked instrument of finance capital and architect of illegal wars of imperialist plunder, most infamously against Iraq in 2003. Having now resigned five times from various positions in his career, including being forced from office twice in the Blair years due to earlier scandals, he was welcomed back to the summit of political power by Starmer. Not only did Mandelson epitomise the New Labour agenda of serving every requirement of the banks and corporations, but his close relations with Epstein were seen at the time as an asset that would facilitate efforts to woo the Trump administration.

For the working class, the central issue is not holding Mandelson or Mountbatten-Windsor to account through parliamentary debates, humble addresses, or official inquiries—including the public inquiry into Mandelson’s appointment as US ambassador advocated by Your Party leader Jeremy Corbyn.

The fundamental task is the building of a new, independent political party of the working class and making a decisive political break with the entire parliamentary set-up and all its rotten parties. It is the capitalist system they all defend that enabled the financial oligarchy—and figures such as Mandelson and Mountbatten-Windsor—to thrive.