British political parties essentially plan to improve public services without funding, the IFS said.

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Britain's two main political parties have outlined plans to improve essentially unfunded public services, the Institute for Fiscal Studies said on Monday.

In a scathing verdict on Labor and Conservative manifestoes, the think tank said the parties had hidden and avoided difficult economic choices ahead, despite insisting their tax and public spending plans had been fully spent.

IFS director Paul Johnson said that regardless of who takes office, if they are unlucky they will soon face stark choices. Raise taxes more than they told us in their manifesto. Or, cut back on some areas of spending. Or borrow more and be content with your debt growing longer.

He added that on July 4th, he would vote in a knowledge vacuum.

The damning account of the economic dilemma facing both parties comes as the election campaign enters its final stages. Labor is widely expected to win next week, while the struggling Tories have been dealt a further blow by the growing gambling scandal.

IFS said both parties had entered into a tax lock arms race, competing to rule out many ways to raise additional revenue while promising that the debt would be reduced within five years.

This tax lock is a mistake, Johnson said. If future governments decide they actually want to raise more money to fund public services, they will restrict the policy. They also placed severe constraints on tax reform.

Helen Miller, IFS deputy director, said the Labor government would need to make politically difficult reforms to capital gains tax if it wanted to raise big money in an area where it has not yet ruled out changes, which could discourage investment.

A Labor spokesman said: I am under no illusions about the scale of the challenge we will inherit if elected, but I do not accept that the economy cannot be any better than it is now under the Conservatives.

They added that the party's manifesto is a fully funded plan to transform the country and provide economic stability.

Labor's campaign is focused on plans to strengthen public finances through reforms to boost economic growth, a claim the IFS has questioned.

The committee estimated that if the Office for Budget Responsibility raised its forecast for UK GDP growth by 0.5 percentage points, the government would avoid spending cuts of $30 billion.

But the OBR's forecasts are already more optimistic than most, he added, and fortunes could easily turn against the new government.

IFS deputy director Carl Emmerson said good policy-making could stimulate growth, but certainly not faster.

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The IFS described Labor's manifesto on spending on new public services, for example teacher recruitment and school breakfast clubs, as minor.

But he added that despite the party's biggest pledge to increase green investment by $5 billion a year, net public sector investment would still fall.

The IFS said both parties had pledged to cut NHS waiting times, ambitiously expand the NHS workforce, build more hospitals and tackle crime without allocating new funding.

This statement, which is fully charged, seems to imply that all this could be provided for free. Johnson said that could not be the case.

Implementing the NHS workforce plan may require additional funding equivalent to 3.6% of annual national income. Both parties also pledged to substantially maintain school spending while increasing defense spending and funding new child care qualifications.

This would mean sharp cuts in spending on non-protected areas such as courts, prisons and local government – the equivalent of $9 billion a year by 2028 under Labor's plan and $18 billion a year under the Conservative plan, the IFS said.

The IFS also criticized the manifestos of Reform UK and the Green party, saying they made unattainable claims on tax and were helping to poison the entire political debate.

Video: Sketchy Politics: Election Extinction?

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