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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Environmental Adviser - Maternity Cover

£37040 - £43600 per annum: Recruitment Genius: The UK's export credit agency a...

Recruitment Genius: CBM & Lubrication Technician

£25000 - £27500 per annum: Recruitment Genius: This company provides a compreh...

Recruitment Genius: Care Worker - Residential Emergency Service

£16800 - £19500 per annum: Recruitment Genius: Would you like to join an organ...

Recruitment Genius: Senior Landscaper

£25000 - £28000 per annum: Recruitment Genius: In the last five years this com...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones