A recording of comments made by Charles Grant, the director for the Centre of European Reform, has been published where he outlined how the Treasury is attempting to persuade Britain to stay in the EU’s customs union.
The revelation follows months of concern that Chancellor Philip Hammond is trying to force Britain to stay under Brussels rule and last night a leading Brexit group Leave Means Leave demanded an inquiry into the Treasury.
Remaining in the customs union means that Britain would not be allowed to have its own trade policy and be dictated to from rules drawn up by Eurocrats in Brussels.
Speaking at a dinner at the strongly pro-EU magazine Prospect in October, Mr Grant also revealed that the Treasury has secret papers to be used to dissuade politicians from allowing Britain to fully regain its independence.
The revelation comes after a Whitehall paper arguing that the best option for Britain is to remain in the customs union and single market was leaked to a website this week in what ministers branded an attempt to “undermine Brexit”.
The paper was contradicted by Department for International Trade figures which reveal that Britain’s Brexit boom means exports of services increased by 15.8 per cent to a record £142.7 billion in 2016 – driven by the financial and insurance industry.
In the recording Mr Grant suggested that the parliamentary arithmetic of Labour and Tory rebels could force Britain to stay in the customs union.
But crucially he added: “The Treasury is determined to stay in the customs union.
“In private Treasury officials say that they know we are going to stay in during the transition and they hope that when we are in the transition people will understand that the costs of leaving are rather high.
“There is unpublished papers sitting in the Treasury showing that the economic costs of leaving the single market and customs union are much greater than the benefits of free trade agreements with every other country in the world.”
Leave Means Leave co chairman Richard Tice said: “This confirms what we feared from the start – the Treasury is actively working against what is in the national interest with their deliberate false forecasts and by disobeying the declared will of the Prime Minister and policy of the Cabinet.
“Leaving the customs union is absolutely essential in order to take back control from Brussels and maximise the huge Brexit opportunities.”
He demanded an inquiry into the department and that “anybody implicated should be fired, from top to bottom.”
The revelation followed a row which started in Brexit questions in the Commons when senior minister Steve Baker was asked about Mr Grant’s comments and raised concerns about their implications.
Conservative MP Jacob Rees-Mogg asked Mr Baker to confirm if he heard about Mr Grant’s comments suggesting 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 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. I think we need to be very careful not to take this forward in an inappropriate way. But he has reminded me of something which I heard.
“I think it would be quite extraordinary if it turned out that such a thing had happened.”
Earlier in the week Mr Baker said the leak of a civil service impact report was an “attempt to undermine our exit from the EU” and risked “exposing our negotiating position”.
Brexit Secretary David Davis yesterday also told MPs that every forecast about the post-Brexit period “has been wrong”.
Despite, the recording appearing to stand up the claims made in the Commons, Mr Grant issued a denial.
He tweeted: “Let my clarify. What Rees-Mogg said I said is partially true, partially untrue.
“I never said Treasury officials had deliberately constructed models to show all futures outside the customs union were bad, with the intent of influencing policy.”
Meanwhile, the head of the civil service appeared to go to war with ministers defending the integrity of analysts in the civil service.
Tweeting a picture of himself at a civil service analysts event, he said: “Every day their great work supports the Government in making evidence-based policy & helps deliver better public services across the country.”
Dave Penman, general secretary of the FDA union which represents senior officials, said: “These cowardly actions are beneath the office he holds, and Mr Baker risks seriously undermining the Government he is a part of.”
Downing Street said a senior Number 10 aide had spoken to Mr Baker about the remarks, and that Prime Minister Theresa May had full confidence in the minister.
February 1st, 2018: Express