Brexit minister who said civil servants may have rigged analysis will escape disciplinary action, says Downing Street

Steve Baker is spoken to by Prime Minister's aide - but there is 'no reason' to take the matter further, No 10 says

A minister who suggested Treasury officials may have distorted an analysis to try to secure a soft Brexit will escape disciplinary action, despite a furious backlash.

Downing Street said Steve Baker had been spoken to by a senior aide to the Prime Minister, but there was “no reason” to take the matter further.

Instead, a spokesman denied Mr Baker had suggested he believed a story he claimed to have heard that civil servants had rigged an impact analysis in order to keep Britain in the UK customs union.

The stance came despite the minister telling the Commons it “would be quite extraordinary if it turned out that such a thing had happened” – apparently making clear that he considered it possible.

Mr Baker also pointed to the need “to uphold and support the impartiality of the civil service”, during the extraordinary outburst in the Commons.

However, the No 10 spokesman said: “The minister made clear in the House that it was implausible that the Treasury would be deliberately trying to undermine government policy.”

The think-tank head who spoke with the minister - Charles Grant, of the Centre for European Reform – has flatly denied he had made any allegation about a civil service conspiracy.

But, the spokesman added: “We have spoken to Steve Baker and we have no reason to doubt his account.”

The spokesman said Mrs May had full confidence in her Brexit minister, that he was “doing a good job” and that he had “set out the events as he recalls them”.

However, Tom Brake, the Liberal Democrat Brexit spokesman, told The Independent that Mr Baker should be disciplined and investigated for a possible breach of the ministerial code.

“Ministers should never be in the business of fanning conspiracy theories,” he said.

“This is exactly what minister Baker has done. Either he knows officials deliberately skewed their research, or he doesn't. His words are not worthy of a Government minister.

“This is not a case of the civil service conspiring against Brexit, but of the facts conspiring against the agenda of Brexiteers like Mr Baker.”

Dave Penman, general secretary of the FDA union which represents senior officials, accused Mr Baker of giving oxygen to “a half-baked conspiracy theory about the civil service”.

“It is not good enough for Mr Baker to simply shrug his shoulders and allow unfounded accusations about officials to go unchallenged.

“These cowardly actions are beneath the office he holds, and Mr Baker risks seriously undermining the Government he is a part of.”

And Pat McFadden, a Labour supporter of the Open Britain campaign for close links with the EU, said: “This week we’ve seen ministers rubbish their own Government’s documents, attack all forecasting, take pot shots at the Bank of England and reprimand parliament about its role.

“None of this is healthy for our democracy. The response to the reports of the Government’s Brexit analysis have been like something from conspiracy-theory central.”

Meanwhile, Sir Jeremy Heywood, the head of the civil service, appeared to take a sideswipe at Mr Baker, when he tweeted that he was “proud” to have spoken to a conference of officials.

“Every day their great work supports the Government in making evidence-based policy & helps deliver better public services across the country,” the Cabinet Secretary posted.

The controversy blew up amid fury over the leak of secret Brexit analysis, now to be released to MPs, which concluded the UK will be poorer under all mooted exit options.

Brexiteers have privately accused Sir Jeremy of conspiring with the Treasury to produce the devastating research, without the knowledge of ministers in the Department for Exiting the European Union (DExEU).

The allegation was made public when Mr Rees-Mogg asked Mr Baker to confirm that Mr Grant 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 were bad and that officials intended to use this to influence policy”.

Mr Rees-Mogg added: “If this is correct, does he share my view that it goes against the spirit of the Northcote rebellion reforms that underpin our independent civil service?”

Mr Baker replied: “I am sorry to say that my honourable friend's account is 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.

“I think we must proceed with great caution in this matter but I heard him raise this issue.”

Challenged by Opposition MPs, Mr Baker added: “I didn't say it was correct. I said the account that was put to me is correct. It was put to me. I considered it an extraordinary allegation. I still consider it an extraordinary allegation."

But, speaking soon afterwards, Mr Grant said he had simply passed on that he had heard Treasury forecasting had shown free trade agreements would fail to compensate for the economic costs of leaving customs union.

“I did not say, or imply, that the Treasury had deliberately developed a model to show that all non-custom union options were bad, with the intention to influence policy.”