David Cameron wanted to wave through donor's policy to destroy rights of workers

Controversial report by venture capitalist who gave Tories £600,000 was blocked by Lib Dems

A major donor to the Conservative Party proposed the dilution of workplace rights in a report which won the backing of David Cameron but was blocked by the Liberal Democrats.

Adrian Beecroft, a venture capitalist who has given £593,000 to the Conservatives since Mr Cameron became leader in 2005, recommended companies be allowed to sack unproductive workers at will. The businessman, whose interests include payday loans company Wonga.com, argued that "coasting" workers inhibit economic growth and deter employers from recruiting.

Many of his sweeping proposals would have gone ahead if the Tories governed alone, Lib Dem ministers claimed, because Nick Clegg's party could not have mounted its strong rearguard action inside the Coalition.

Following the cash-for-access row, some civil servants are said to be worried about the involvement of a Tory donor in the Government's policy-making process. "It has raised eyebrows," said one Whitehall source.

Peter Cruddas, the Tories' former co-treasurer, claimed to undercover reporters that big donors could have their ideas fed into the Downing Street policy unit – a charge denied by No 10.

Cameron allies insist there was no reason to bar Mr Beecroft from advising the Government because he had given money to the Tories. He was not among the Tory donors entertained by Mr Cameron at Downing Street or Chequers and there is no suggestion that his companies would have benefited directly from the reforms he proposed.

His report, submitted last autumn, remains shrouded in mystery. Unusually for a Government-ordered study, it has not been published. Downing Street is coy about who commissioned it. The driving force is believed to be Steve Hilton, Mr Cameron's strategy adviser, who is leaving No 10 in May.

Ministers believe the report has not been published as it is too sensitive. Ideas are said to include watering down maternity rights, which would have jeopardised Mr Cameron's goal of making Britain the most "family-friendly" country in Europe. Another official said: "His report was full of the Tory millionaires' philosophy that government should not interfere in anything."

Mr Beecroft's plan for "no fault dismissal" was taken up by Mr Cameron and George Osborne, the Chancellor. It would allow a company to fire unproductive workers without the right to claim unfair dismissal, but they would receive statutory redundancy pay.

Vince Cable, the Business Secretary, whose department is responsible for employment law, said he did not want to bring in a "hire and fire culture". Unlike Mr Beecroft, he detected little demand for such rules.

After a row in the Coalition, a compromise was reached in which Mr Cable agreed to consider "no-fault dismissal" for firms employing fewer than 10 people. But he said he has no intention of bringing it in. A Liberal Democrat source said: "It's in the long, long grass."

Ed Miliband will today seek to capitalise on the cash-for-access controversy by linking it to the Budget. He will say: "The last week has shown this Government for what it is: one that works for the millionaires... David Cameron prefers to listen to those who have given millions of pounds to the Conservative Party in exchange for donor dinners and special access in Downing Street."

The Labour leader will issue a five-point "action plan" to help a squeezed "Middle Britain" similar to the credit-card sized "pledge card" which helped Tony Blair win a landslide in 1997. The plan includes stopping the Budget's "granny tax" and the reduction in the 50p top rate. In an attempt to reassure voters worried that Labour would spend too much, Mr Miliband will say: "These are measures that do not require extra spending. But they do require a different set of priorities; different values; a government that is on your side, and sometimes the courage to take on powerful and well-financed organisations which will not like it."

The £100m man: Beecroft's fortune

Adrian Beecroft has been a leading figure for 25 years in venture capital and private equity. He joined Apax in 1984 and grew its funds to $20bn before retiring as its senior managing partner. He is now chairman of Dawn Capital – which owns Wonga.com, the online short-term high-interest loans company – and his estimated wealth is £100m. He conceded a "downside" of his main proposal is employers could be accused of firing staff they "did not like," but said: "While this is sad, I believe it is a price worth paying for all the benefits that would result from the change."

Party's over for persona non grata

Sarah Southern used to boast that at one time she had spent more time with David Cameron than "with anybody else in my life". But yesterday Downing Street made clear that she would never knowingly be allowed in the same room as him again after her pivotal role in introducing the party to fake potential donors.

The Prime Minister's spokes- woman said Ms Southern was "persona non grata" after she unwittingly brought undercover reporters to the door of the party's joint Treasurer Peter Cruddas and unleashed the cash-for-access scandal.

Although not high profile, as an events manager Ms Southern had significant access to Mr Cameron. She travelled on the Conservative battle bus and was responsible for making sure trips went smoothly.

"I spent more time in the first third of [2010] with DC than I did with anybody else in my life," she said. "I am friends with all the people who are now his closest advisers... I'm also friends with a number of people in the Cabinet."

In June 2011 she set up her own company, Sarah Southern Consulting – with a business card showing her with the Prime Minister.

It is unlikely to get much business now.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy as ECB finally wield the axe
Life and Style
food + drink
Voices
John Profumo and his wife Valerie Robson in 1959
voicesWard committed no crime, and the truth is still being covered up, writes Geoffrey Robertson QC
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas