• Former Labour Party secretary of state Peter Mandelson attends the London Labour Party Conference in 2023. All photos: Getty Images
    Former Labour Party secretary of state Peter Mandelson attends the London Labour Party Conference in 2023. All photos: Getty Images
  • Mr Mandelson delivers a keynote speech during an event hosted by the Britain Stronger In Europe campaign in 2016 in London
    Mr Mandelson delivers a keynote speech during an event hosted by the Britain Stronger In Europe campaign in 2016 in London
  • Mr Mandelson, then business secretary, is driven in a electric car during a visit to The University of Birmingham in 2010
    Mr Mandelson, then business secretary, is driven in a electric car during a visit to The University of Birmingham in 2010
  • Mr Mandelson dances at The Tower Ballroom in Blackpool in 2010
    Mr Mandelson dances at The Tower Ballroom in Blackpool in 2010
  • Mr Mandelson attends the State Opening of Parliament in 2009 in London
    Mr Mandelson attends the State Opening of Parliament in 2009 in London
  • Mr Mandelson looks on as he and then UK prime minister Gordon Brown attend an event in Liverpool in 2009
    Mr Mandelson looks on as he and then UK prime minister Gordon Brown attend an event in Liverpool in 2009
  • Mr Mandelson walks to the European Commission offices in Westminster in 2008
    Mr Mandelson walks to the European Commission offices in Westminster in 2008
  • Mr Mandelson, then Commissioner for European Trade, addresses the annual CBI Conference in 2004, in Birmingham
    Mr Mandelson, then Commissioner for European Trade, addresses the annual CBI Conference in 2004, in Birmingham
  • Mr Mandelson looks on during a meeting with Chinese Minister of Commerce Bo Xilai at the Great Hall of the People in 2005 in Beijing
    Mr Mandelson looks on during a meeting with Chinese Minister of Commerce Bo Xilai at the Great Hall of the People in 2005 in Beijing
  • Mr Mandelson takes his seat for the first time at the European Parliament in 2004 in Brussels, Belgium
    Mr Mandelson takes his seat for the first time at the European Parliament in 2004 in Brussels, Belgium
  • Mr Mandelson on the second day of the Labour Party annual conference in 2004 in Brighton
    Mr Mandelson on the second day of the Labour Party annual conference in 2004 in Brighton
  • Former Labour party leader Neil Kinnock, Mr Mandelson and Mo Mowlam at the Labour Party Conference in Brighton, in 1997
    Former Labour party leader Neil Kinnock, Mr Mandelson and Mo Mowlam at the Labour Party Conference in Brighton, in 1997

Political strategist Peter Mandelson named UK's Washington ambassador


Thomas Harding
  • English
  • Arabic

The importance Britain’s Prime Minister attaches to retaining good relations with the incoming Trump administration was conveyed on Friday by the announcement that veteran politician Peter Mandelson will become the next ambassador to Washington.

In choosing a Labour political heavyweight, Keir Starmer is clearly eager to embrace the new US president, especially with fears over hefty trade tariffs.

Political insiders have told The National that Lord Mandelson is the ideal person for the job. He is a man very close to the well-connected former prime minister Tony Blair, which will also help in forging stronger links with the Middle East. He is also a close ally of Morgan McSweeney, Mr Starmer's chief of staff.

It is the first political appointment to the Washington ambassadorship in nearly 50 years – Mr Starmer axed the civil service choice shortly after winning July’s election – and was followed by a raft of new appointments to the House of Lords on Friday afternoon.

Sue Gray, the Partygate investigator who went on to become Mr Starmer’s chief of staff, was among 30 new Labour peers, which also included former shadow cabinet minister Thangam Debbonaire. There are also six nominations from Conservative leader Kemi Badenoch, they include Liz Truss’s deputy prime minister Dame Therese Coffey, as well as former housing minister Rachel Maclean.

Lord Mandelson's new role makes it clear that the Labour government is nervous about the damage Mr Trump might do to the British economy. With the president-elect threatening 25 per cent tariffs on imports virtually from every country, Britain’s fragile economy will be particularly vulnerable.

Mr Starmer said the appointment tapped considerable foreign and economic policy experience. “The United States is one of our most important allies and as we move into a new chapter in our friendship, Peter will bring unrivalled experience to the role and take our partnership from strength to strength,” he said.

The future president has labelled the new UK government “far-left” wing and previously suffered visceral comments from many Labour politicians who now find themselves in government.

Unfortunately for Lord Mandelson, he is among their number. He once called Mr Trump a “danger to the world” and “little short of a white nationalist and racist”, as well as labelling him a “bully and mercantilist”.

Peter Mandelson is the ideal person for the job, political insiders told The National, and very close to former prime minister Tony Blair, which will also help in forging stronger links with the Middle East. AFP
Peter Mandelson is the ideal person for the job, political insiders told The National, and very close to former prime minister Tony Blair, which will also help in forging stronger links with the Middle East. AFP

But the Labour peer John Woodcock, Lord Walney, called his appointment a “superb choice” as it came at “a moment of huge challenge and potential disruption for the Western alliance”.

“This is a sign that Keir recognises how much is at stake with what is happening in the world, but particularly with the incoming Trump presidency and that he wants to put his very best people in place,” he told The National.

Lord Walney added that Mr Mandelson possessed the key political quality in having “empathy and understanding for the perspectives of other people around the table – he is brilliant at that”.

A senior Labour insider said it was "the right choice". He said: “He is the only Labour person who can penetrate Trump administration and gain his respect, and Starmer fully understands this.”

Trump trade

In Lord Mandelson, the British have the arch political player, who has shown that he is able to mix with the political elite, but will now need to gain the trust of those who have some forthright views on the world.

He was a key player in the New Labour movement and was appointed to Cabinet three times. He also spent four years as an EU trade commissioner, meaning Lord Mandelson will bring expertise to deal with the coming challenges.

Downing Street, which has struggled to find its feet on foreign affairs, was also said to have been impressed with his broad contacts in the US, largely accumulated from his role as chairman of the strategic advisory firm, Global Counsel, which advises major companies.

Lord Mandelson, a former business secretary who joined the House of Lords when he was appointed by Gordon Brown, also has more insight into global commerce than many civil servants, making him “the ideal candidate” to represent Britain’s economic and security interests in the US.

And at 71-years-old he is also likely to retain the respect of fellow septuagenarian Mr Trump who is 78.

But Lord Walney, the government’s adviser on political violence, warned that the Trump presidency will “ask profound questions of the way that we work together”.

“We need our very best people engaged with President Trump and Peter is one of the very best politicians at understanding the people around them and how to build alliances.”

Britain’s former US ambassador, Sir Nigel Sheinwald, agreed that the timing of the appointment was key. “He will need all his strategic nous and networking skills to bring UK interests to bear on President Trump at a moment of real risk for those interests.”

Make friends with Musk

The Labour politician's impact on the American political scene, with many people clamouring for Mr Trump’s attention, will need to be fast and he is likely to reach out to key influencers such as Elon Musk.

Happily, Lord Mandelson has already made the right noises by urging the Prime Minister to use the Trump-confidante and fellow right-winger Nigel Farage as “a bridgehead” into the new administration.

Peter Mandelson is likely to reach out to Tesla chief executive and X owner Elon Musk, who is set to have a major influence on the Trump administration. Reuters
Peter Mandelson is likely to reach out to Tesla chief executive and X owner Elon Musk, who is set to have a major influence on the Trump administration. Reuters

“If I were the government here, I’d be asking the embassy in Washington DC to find out who Mr Musk’s other British friends are,” he told Times Radio. “National interest is served in all sorts of weird and wonderful ways.”

Another quality is that unlike other politicians, Lord Mandelson does not “always want to be seen as the smartest kid in the room” and subsequently quickly annoy people.

“Peter is the opposite of that,” said Lord Walney. “He also has very strong relationships with our European allies, is known and trusted by European leaders. So he has the potential to bring the UK back in into that traditional role as a useful bridge between the UK, the USA and Europe.”

Left wing detractors

But not everyone was receptive to the appointment of the man known as the original “spin doctor”, having served as Labour’s director of communications from 1985-1990, suggesting that his past political miss-steps could reoccur.

Lord Mandelson twice had to resign over controversies as a cabinet minister in Tony Blair’s government and, like any successful politicians, he has his foes.

One of those is left-winger John McDonnell, Labour’s former shadow chancellor, who warned against the appointment.

“For many reasons associated with Peter Mandelson’s history in and out of political office many will feel Keir has lost all sense of political judgment on this decision,” he posted.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: December 20, 2024, 4:55 PM