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Mr Baker admitted he should have dismissed the allegation — that Treasury officials were drawing up skewed economic studies to make the case for staying in a customs union with the EU — out of hand when it was raised by fellow Right-winger Jacob Rees-Mogg in the chamber yesterday. Standing up on a point of order, Mr Baker told MPs: “I wish to correct the record of my answer yesterday.” He said he had listened to an audio tape that undermined the account he and Mr Rees-Mogg had given — which was that the allegation had been made to them by the head of the Centre for European Reform think tank, Charles Grant.

If the UK does go down the road of staying in a customs union, we can see what kind of deal might be struck. Britain could end up adopting what John Springford and Sam Lowe of the Centre for European Reform call the “Jersey option” (because the Crown Dependencies enjoy a similar relationship with the EU). ...However, as the CER notes, the Jersey option would require Mrs May to soften many of her red lines and her party would be likely to defenestrate her if she did so.

The storm erupted after Jacob Rees-Mogg asked the minister to confirm if he had heard from Charles Grant, of the Centre for European Reform think tank, that "officials in the Treasury have deliberately developed a model to show that all options other than staying in the customs union were bad and that officials intended to use this to influence policy." Baker said that account was "essentially correct."  "At the time I considered it implausible because my direct experience is that civil servants are extraordinarily careful to uphold the impartiality of the civil service," he added. Grant strongly denied the claims, and Baker was forced into an apology when an audio recording emerged which contradicted the minister's recollection of the comments.

The latest row blew up when Mr Baker was asked by Jacob Rees-Mogg to confirm that Charles Grant, head of the Centre for European Reform, had told him that “officials in the Treasury have deliberately developed a model to show that all options other than staying in the customs union are bad, and that officials intend to use the model to influence policy”.

Theresa May has said Steve Baker will not be sacked over comments made in the House of Commons which appeared to suggest there was a pro-Remain conspiracy. ...Baker failed to challenge a claim from Tory MP Jacob Rees-Mogg on Thursday that Charles Grant, from the Centre for European Reform think-tank, had alleged this was the case to the minister. He vowed to apologise after he was criticised by MPs and the trade union for senior civil servants.

Mr Baker insisted that his comments had been based on an “honest recollection” about the conversation he had with think-tank boss Charles Grant, but he was happy to clarify himself. “As I have put on record many times, I have the highest regard for our hard-working civil servants,” he said.

Jacob Rees-Mogg, a leading anti-EU Conservative MP, had asked Mr Baker in the Commons to confirm whether he had been informed by a think-tank that the Treasury had “deliberately developed a model to show that all options other than [the UK] staying in the [EU] customs union were bad and that officials intended to use this to influence policy”. ...Mr Rees-Mogg suggested Mr Baker had been given this information by Charles Grant, the head of the Centre for European Reform, a think-tank. Mr Grant responded later by saying he recalled discussing Treasury research into Brexit with Mr Baker last October. But Mr Grant added: “I did not say or imply that the Treasury had deliberately developed a model to show that all non-customs union options were bad, with the intention to influence policy.

A Tory minister faces fury after he failed to challenge a "conspiracy theory" that civil servants are trying to sabotage Hard Brexit. Brexit minister Steve Baker said it was an "extraordinary allegation" that Treasury officials - who are meant to be impartial - have been promoting staying in the customs union in order to influence policy. Speaking in the House of Commons, told MPs the theory was "implausible" but did not say it was untrue - making his boss, Brexit Secretary David Davis, visibly wince. That's despite the man accused of making the claim, Charles Grant of the Centre for European Reform, categorically denying he ever did so.

Jacob Rees-Mogg asked Mr Baker to confirm if he had been told by the Centre for European Reform's Charles Grant that "officials in the Treasury have deliberately developed a model to show that all options other than staying in the customs union were bad and that officials intended to use this to influence policy".