[Conservative MP] Bernard Jenkin claimed the government watered down the Trade Union Bill to ensure union support in its campaign to keep Britain in the EU.
Mr Jenkin told MPs “this stinks” like “cash for questions” and showed the government was at the “rotten heart of the European Union”.
But Business Minister Nick Boles said his claims were “not right”. He told Mr Jenkin, who is a leading figure in the Vote Leave campaign, that “not every compromise is a conspiracy”.
Mr Jenkin made his comments in the Commons on the day the Guardian published an article jointly written by Prime Minister David Cameron and the former TUC general secretary Sir Brendan Barber.
In it, they say that “very special circumstances” have brought them together, adding that despite their political differences they are “united in our conviction that Britain – and Britain’s workers – will be better off in a reformed Europe than out on our own”.
Last week the government backed down over plans to end the right of workers to pay union subscriptions by deducting them from their wages.
MPs approved concessions to the Trade Union Bill on Wednesday following a series of defeats over the plans in the House of Lords. They included a climb-down on attempts to force all union members to “opt-in” to paying a political levy – which will now only apply to new members.
Mr Jenkin told MPs in the Commons: “Yesterday, the ministers’ concession was wholly unexpected.” He questioned whether the changes were linked to reported claims that unions could donate up to £1.7m to the “Labour In for Britain” campaign to remain in the European Union.
Mr Jenkin said: “It has been confirmed to me through more than two independent sources that No 10 instructed these concessions to be made after the discussions with trade union representatives.
“This being true would amount to the sale of government policy for cash and political favours.”
He went on: “This stinks, this reeks of the same as cash for questions. This shows this government really is at the rotten heart of the European Union.”
But Mr Boles said the Cabinet Office had advised him there was no breach of the ministerial code and nothing for the prime minister’s adviser on ministerial interests to investigate.
Mr Boles said it was “customary” for ministers to have regular discussions with shadow ministers to discuss possible compromises that would secure the passage of a Bill.
“The Trade Union Bill is now in ping-pong and, as is customary at such times, ministers have held regular discussions with shadow ministers to discuss possible compromises that would secure passage of the Bill and delivery of the commitments made in the Conservative Party’s manifesto,” the business minister said.
Mr Boles also said that the TUC, GMB Unite and Unison had declared their support for remaining in the European Union before concessions were offered.
He added that major opposition from peers, including prominent Conservatives, had encouraged the government to make concessions.”