Hi Steve,
I would not recommend doing the OU masters alongside a research degree. The workload of the two combined is likely to bring your mark down in both and not show what you are capable of.
The pass mark at my DTC from MSc to PhD is 65% in the Masters, and as the OU has a different grade structure to other universities I would push the percentage angle rather than the OUs grade boundaries.
Doing a Masters is good experience for a PhD which is why it is becoming the norm that people now have a masters before PhD study. However, I presume you are working as well as distance learning which also would show maturity and ability to cope with the different work conditions of a PhD.