By William James
LONDON (Reuters) - Britain must review whether lawmakers with outside commercial interests who are also paid to scrutinize government policy could damage the public's perception of parliament before a 2015 election, the official watchdog said on Thursday.
Kathryn Hudson, the Parliamentary Commissioner for Standards, called for an inquiry into the way parliamentary committees are run after investigating complaints about a senior lawmaker in Prime Minister David Cameron's Conservative party.
She cleared Tim Yeo, the chairman of an influential committee which scrutinizes the government's energy policy, of breaching lobbying rules.
But she said the case had raised concerns about whether the public viewed lawmakers who chair such committees as acting impartially when examining policy in a subject area in which they were also involved commercially.
Public trust in political parties is already low and politician fear voter apathy may affect the parliamentary poll.
Hudson said outside financial interests could be beneficial and enhance specialist knowledge of a subject area.
But she added: "There is equally a reasonable concern that that member (of parliament) is then placed in a privileged position which he or she may be able to exploit for their own interests with few checks and balances to control this."
Britain's parliament has a complex system of committees, made up of elected lawmakers, to scrutinize the government's work. While they do not have statutory powers their reports are often influential in shaping government policy.
Current rules require committee members to declare their interests, but do not prevent them from being paid by external firms.
Tim Yeo, a former government minister, temporarily stepped down from the Energy and Climate Change Committee in June over claims made by a national newspaper that he had broken internal rules.
The committee said Yeo would return to chair a meeting next Tuesday.
The government is introducing new laws to govern how much influence outside lobby groups should have over politicians after Cameron said in 2010 that lobbying was "the next big scandal waiting to happen".
(Editing by Andrew Osborn and Alistair Lyon)
(This story was refiled to fix grammar in the headline)