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Baker, who was a key figure in the Leave campaign, told the House of Commons on Thursday that he had been told by Charles Grant, director of the Centre for European Reform, that Treasury officials had sought to distort economic modeling on Brexit to force a change in government policy. He was responding to a question from Jacob Rees-Mogg, a devoted Brexit backer who is a potential leadership rival to Theresa May.

Steve Baker was asked by Tory MP Jacob Rees-Mogg in the House of Commons on Thursday to confirm that he had heard that Treasury officials had "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".The apparent foundation for the claim was later called into question by Centre for European Reform director Charles Grant, the man Rees-Mogg named as the source for his claims.Grant issued a statement that said he "did not say or imply" that the Treasury "had deliberately developed a model to show that all options outside the customs union were bad with an intention to influence policy".

Steve Baker’s explosive claims sparked a Whitehall civil war but he later apologised after his allegations were disowned by the expert source he said he heard the rumour from. ...Last night Mr Baker said: “This morning in Parliament, I answered a question based on my honest recollection of a conversation. As I said, I considered what I had understood to be implausible, because of the impartiality of the civil service.“The audio of that conversation is now available and I am glad the record stands corrected. In the context of that audio, I accept that I should have corrected the premise of the question.

Civil servants may be secretly distorting evidence to “influence” the Government to stay in the EU’s customs union, a Brexit minister has suggested. Steve Baker floated the extraordinary conspiracy claim on the floor of the House of Commons, telling MPs he did not necessarily believe it – but did not rule it out.“I think it would be quite extraordinary if it turned out that such a thing had happened,” the hard Brexit supporter said.Meanwhile, the think-tank head who spoke with Mr Baker - Charles Grant, of the Centre for European Reform – flatly denied he had made any allegation about a civil service conspiracy. 

Mr Rees-Mogg asked Brexit minister Steve Baker in the Commons to confirm if he had been told about allegations that civil servants were trying to get ministers to back staying in the EU's customs union. ...The Centre for European Reform's Charles Grant, who was alleged to have been the source of the claim at a Tory party conference event last year, denied making it.

In an extraordinary exchange in the Commons on Thursday, Rees-Mogg asked Baker to confirm whether he had been told Treasury staff had deliberately skewed analyses to show all scenerios apart from remaining in the Customs Union would be bad for the UK economy. “Will he confirm that he heard from Charles Grant, from the Centre For European Reform, that officials in the Treasury had 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?” the hardline Brexiteer asked.

The Conservative Jacob Rees-Mogg has sought to defend his suggestion that Treasury civil servants are rigging their Brexit analysis. He raised the allegation in the Commons this morning, suggesting that Charles Grant, director of the Centre for European Research, had said that “officials in the Treasury had 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.” Grant has denied saying this, and others who were at the event where the remark was supposed to have been made have backed Grant’s account. In response Rees-Mogg tweeted this this afternoon.

John Springford and Sam Lowe, of the Centre for European Reform, have proposed that by emulating the Island’s trade relationship with the EU, the UK government could resolve the Irish border issue and secure enough bargaining power to apply tighter immigration controls, which are two key Brexit issues.

“Hopes that Italy could be the third engine of a Franco-German partnership to renew the EU are probably mistaken,” writes Luigi Scazzieri of the Centre for European Reform. “No matter what happens on March 4th, tensions between the new government and the EU are assured.”