British political parties have risk of 'policy capture' by powerful donors, warns OECD report into private funding

65 per cent of political party fnding comes from private sources

Andrew Tyrie MP says it 'leaves a stench in the nostrils of the electorate'

Britain has some of the highest rates of private funding for political parties in Europe, according to an international study which highlights the risk of "policy capture" by powerful donors.

The report found that 65 per cent of political party funding in the UK comes from private sources – the joint highest of 16 European countries analysed by the Organisation for Economic Cooperation and Development (OECD).

Britain is also one of only 10 out of 25 wealthy countries with no limit on the size of donations to both political parties and political candidates in elections.

The OECD report said that, across the world, increasing concentration of wealth in fewer hands posed “a significant threat to political and economic systems” warning that, without proper regulation, could allow “special interests to exercise undue influence and ‘capture’ the policy process”.

Yesterday Conservative MP and chair of the Treasury Committee Andrew Tyrie said that Britain needed a cap on the amounts that could be donated to political parties.

Mr Tyrie told BBC Radio 4’s World at One programme that there was a risk of both rich donors and unions attempting to use donations to "buy access, influence and honours".

"It leaves a stench in the nostrils of the electorate," he said. "There should be a cap on the amount that can be donated."

The Electoral Reform Society said OECD’s report was a sign of a party funding system that was "completely out of step with most advanced democracies".

Katie Ghose, the organisation’s chief executive, said: "With no cap on donations to parties and no significant public funding, there is a real risk, as this report suggests, of 'policy capture' by big organisations and rich donors."