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Jacob Rees-Mogg, the current chairman of the ERG, asked Mr Baker in the Commons on Thursday if he had heard a claim from Charles Grant, director 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”. Mr Baker said that Mr Rees-Mogg’s account was “essentially correct”, although he said he could not confirm that civil servants had deliberately skewed data. Mr Grant later disputed the account of his remarks, saying that he had told a lunch meeting that Treasury officials favoured a soft Brexit but had not suggested that their data modelling was influenced by that view.

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 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.

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.

Minister Steve Baker doubled-down on comments he made earlier in the week when he confirmed backbencher Jacob Rees-Mogg's claim that he had heard from Charles Grant, director of the Centre for European Reform, 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".

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.

Charles Grant, director of the Centre for European Reform, said: "I told Mr Baker at Conservative Party conference that I was aware of work in the Treasury demonstrating that the economic benefits of Free Trade Agreements with other countries would be significantly less than the economic costs of leaving the Single Market and Customs Union.  "I did not say that the Treasury intended to use this to influence policy, or the Treasury deliberately developed this model with a view to influencing policy."