Tory donor's bid to curb job security provokes Lib Dem anger

Businessman accused of profiteering at expense of poor wrote employment rights report for Cameron

David Cameron faced a furious Liberal Democrat backlash last night after a private Downing Street report by an influential Tory donor called for firms to be allowed to sack poorly performing staff without explanation.

The controversial call came from a multi-millionaire venture capitalist, Adrian Beecroft, whose interests include an online company offering payday loans at huge rates of interest.

Mr Beecroft, who has given more than £530,000 to the Tories under Mr Cameron, was asked by him to examine how employment law could be overhauled to boost economic growth.

To Lib Dem anger and surprise, Mr Beecroft has recommended ditching unfair dismissal rules. Unions were also furious, further souring the atmosphere as ministers try to avert widespread strikes over pension reforms.

Last night Tory sources distanced themselves from the report, saying its findings were unlikely to "see the light of day".

Lib Dem sources called him an "ideological" figure whose conclusions they would not support. One said: "He is a private individual who has produced a report not based on any evidence."

Norman Lamb, Nick Clegg's chief of staff and a former employment lawyer, said it would be "madness" to throw away workers' protections against unjustified sackings.

He added: "It is likely to have the unintended consequence of destabilising consumer confidence at a very difficult time. If every employee in the land faced the prospect that they could be removed arbitrarily, the destabilising effect could be devastating. It would legitimise Victorian employment practices."

Mr Beecroft, worth an estimated £100m, built his fortune through the venture capital firm Apax Partners.

He now chairs Dawn Capital, whose portfolio includes, which offers short-term loans to tide people over until their next pay cheque.

A recent probe by the consumer watchdog Which? found it quoted £36.72 interest on a 30-day loan of £100 – equivalent to a 4,394 per cent annual interest rate. Mr Beecroft was called in by Steve Hilton, the Prime Minister's policy chief, to conduct the "blue skies thinking" on employment legislation.

His arrival has irritated the Department for Business, headed by the Liberal Democrat Vince Cable.

Early reports of Mr Beecroft's conclusions suggested he wanted to scrap parental leave, scale back flexitime working and change maternity pay to lift the burden on business.

A leaked version of his interim conclusions yesterday showed he was focusing on the UK's "terrible" employment laws, which he said let staff "coast along" with little fear of being replaced.

Downing Street said the leak did not show Mr Beecroft's final conclusions. No decision had been taken on whether to publish his final report, a spokeswoman said.

Mr Beecroft's ideas were iwelcomed by the British Chambers of Commerce. Its director-general, John Longworth, said: "Too many companies... tell us dismissal rules and fear of costly tribunal claims stop them taking on staff."

But Brendan Barber, TUC leader, said: "This proposal does nothing for growth... it shows the kind of economy those close to the Prime Minister want to create, in which nasty bosses are given full licence to undermine those trying to maintain decent standards."

Adrian Beecroft: Tycoon leading the sack race

Senior civil servants, the Sir Humphrey heavyweights, sometimes call them the "Daleks of Downing Street". Tony Blair had John "Blue Skies" Birt. David Cameron has "shoeless" Steve Hilton and a new thinker with a growing profile – Adrian Beecroft.

Mr Beecroft, 63, is one of Mr Hilton's "red team" of businessmen supposed to think the unthinkable and write the politically unpalatable.

Mr Beecroft's report for the Prime Minister that "terrible" laws enshrining employment rights are hampering growth will be no surprise to those who know his background. With a City career in global finance and investment spanning years, he turned a £10m venture capital company, Apax, into a long-term private equity player now managing over £20bn in global assets.

There is no mention in Apax's guide to how useful Luxembourg or the Cayman Islands can be. The tax havens were used by Apax in 2008 when it acquired the publisher Emap. Corporation tax in the Caymans? Zero. Offshore tax structures have proven controversial for the Conservatives when used by some of their advisers and donors.

The PM has Mr Beecroft – a significant donor to the Tory Party, he and his wife have given more than half a million pounds to the Tories since Mr Cameron became leader – to now consult on everything from pensions to cutting the NHS. This year Mr Beecroft, who has a personal fortune of more than £50m, recommended a delay in pensions reform; told No 10 that the NHS cuts would have to go deeper; and research support for charities like Cancer Research was unaffordable.

Although Mr Beecroft retired from Apax in September 2008 as their senior investments officer, the company owns or manages healthcare companies such as General Healthcare which stand to benefit from the increased use of the private sector inside the NHS.

Mr Cameron has, so far, kept Mr Beecroft away from Downing St, his thinking instead being filed into the No 10 ether through reports.

James Cusick

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Ashdown Group: Senior Accounts Assistant - Accounts Payable - St. Albans

£26000 - £28000 per annum + benefits : Ashdown Group: Senior Accounts Assistan...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Recruitment Genius: Installation and Service / Security Engineer

£22000 - £40000 per annum: Recruitment Genius: This company is part of a Group...

Recruitment Genius: Service Charge Accounts Assistant

£16000 - £18000 per annum: Recruitment Genius: Are you a a young, dynamic pers...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions