§ The Deputy Prime Minister and First Secretary of State (Mr. John Prescott)
We want to encourage people to stand as local councillors. We recognise their voluntary contribution as an important aspect of public life. We recognise that this commitment can be time-consuming, and therefore welcome employers encouraging their employees to serve as councillors by allowing them paid time-off to carry out their council duties.
The Electoral Commission has published its view that, under Schedule 7 to the Political Parties Elections and Referendums Act 2000 ("the Act"), the provision of such paid time-off should be treated as a political donation to the employee in his or her capacity as a holder of elective office. On the basis of this view, the value of such paid time-off must be reported to the Commission, where the total is more than £1,000 for each employee in the course of a year. In addition, employees will not lawfully be able to accept such paid time-off from their employers where these are not "permissible donors" under the Act.
The Government accepts that there has been uncertainty surrounding the issue. However, the Government's long-standing policy is that the provisions of the Act should not apply to the receipt by a councillor of paid time-off for carrying out his or her duty as a councillor. It would be clearly wrong for some employers not to be able to offer paid time-off to their employees to serve as councillors. Moreover requirements on other employers, and in some cases their employees, to calculate and to report the value of such paid time-off to the Electoral Commission would be a disincentive for employers from supporting employees who wish to serve as councillors.
Consequently, we are proposing to include in the Local Government Bill, announced on 13 November in the Queen's Speech, amendments to Schedule 7 to the Political Parties, Elections and Referendums Act 2000. The effect of these amendments would be to exclude the value of any salary paid to an employee by an employer in respect of time-off taken in order to undertake duties as a local councillor from the definition of a donation in Schedule 7 to the Act. This would mean that it will be open to all employers to grant such paid time-off, and that the value of such time-off would not have to be reported to the Electoral Commission.
We are providing for these amendments to apply with retrospective effect, so that any paid time-off which might have been granted to councillors since 16 February 2001, when the requirements of Schedule 7 to Act came into force, is not to be considered as a political donation.12WS