New Business Secretary Peter Mandelson has taken his place in the House of Lords, being introduced to peers as Baron Mandelson of Foy and Hartlepool.
Lord Mandelson, as he will be known, was supported by Baroness Jay of Paddington and the ex-lord chancellor Lord Falconer of Thoroton.
He wore the traditional ermine-lined scarlet robes and swore allegiance to the Queen at the induction ceremony.
Foy is a village in Herefordshire where he holidayed. He was MP for Hartlepool.
Lord Mandelson was a European commissioner before his resignation earlier this month to take up Gordon Brown's offer of a cabinet job.
His introduction to the Lords came as it emerged he will continue to receive taxpayer-funded EU pay worth £234,000 over three years - in addition to his annual ministerial salary of £104,386.
The Conservatives said the details of the "golden goodbye" from his Brussels role would anger voters in the UK.
Pension scheme
The business secretary is entitled to the EU compensation package despite giving up his post as trade commissioner voluntarily after four years.
Under EU rules, Mr Mandelson will be eligible for around £78,000 in "transitionary payments" annually for the next three years.
The money - £234,000 in total - will also be subject to preferential tax rates devised for EU officials.
The top-up ensures his income in his new job is the same as his £182,500 salary as a commissioner.
Lord Falconer and Baroness Jay supported Lord Mandelson (centre)
In addition, Mr Mandelson's four-year stint in Brussels entitles him to a pension.
When he reaches the age of 65, Mr Mandelson will receive a pension, starting at £31,000 and then rising in line with the cost of living.
A private sector worker who wanted to ensure a similar income in retirement would have to build a pension fund worth more than £700,000.
As he relocates from Brussels to London, Mr Mandelson is also due a one-off resettlement grant of £15,000.
Mark Francois, the Conservative spokesman on Europe, said the details of the ex-commissioner's pay-off would annoy UK voters.
"Not only did Gordon Brown recall Peter Mandelson to shore up his own position, but it adds insult to injury to know taxpayers will have to pay extra for the privilege," he said.
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