IFS Director Paul Johnson said failure to strike such a trade deal “seems to be more of a risk” under the Conservatives than under Labour | Peter Summers/Getty Images UK think tank: No EU trade deal after Brexit risks more austerity Neither the Conservatives nor the Labour Party have put forward credible manifestos, says the Institute for Fiscal Studies.

LONDON — Failure to strike a U.K.-EU trade deal would force the British government to adopt an austerity program in the medium term, according to the Institute for Fiscal Studies.

At a briefing on the U.K. parties’ policy manifestos on Thursday, IFS Director Paul Johnson said failure to strike such a trade deal “seems to be more of a risk” under the Conservatives than under Labour. Such a scenario “would harm the economy” and “increase the debt and deficit,” he said.

If they win the upcoming election, the Conservatives plan to pull the U.K. out of the European Union by January 31 and then push for a trade deal with the EU by the end of a Brexit transition period, planned to run until December 2020. Prime Minister Boris Johnson says a Conservative government will succeed in striking an agreement with the EU and has pledged not to extend this negotiation period.

Labour's Jeremy Corbyn, meanwhile, wants to renegotiate the Withdrawal Agreement Brussels struck with Johnson's government within three months of winning power to keep the U.K more closely aligned to the rest of the EU. Such a deal would be subject to a referendum.

Soon after a collapse in U.K.-EU trade talks, there could be “big giveaways” by the British government, followed by spending cuts in the medium term, according to the IFS Deputy Director Carl Emmerson.

“A return to austerity would perhaps be the most likely outcome, not immediately, but in the medium term,” he said.

Both the Tories and Labour have pledged to end austerity in their policy manifestos ahead of the December 12 general election, but they have proposed very different levels of public spending.

The Conservative program promises just £2.9 billion extra a year by the end of the next parliament, whereas Labour pledges an extra £83 billion a year. This figure is likely to be higher after Corbyn announced that a Labour government would compensate some women who lost out as a result of changes to the pension age.

According to the IFS director, the chances of a Conservative government being able to hold spending down over the course of a five-year parliament in the way that they outlined in their party manifesto “look remote.” It is “highly likely” that a Tory government would be forced to either increase taxes or borrowing, he added.

The Conservatives “might come to regret” its promise not to increase rates of income tax, National Insurance Contributions or VAT, if Brexit delivers a blow to the British economy, he said.

Last month, Joe Twyman, director for polling firm Deltapoll, said the tactical voting sites “have the potential to make a small impact in a small number of constituencies.” He added: “In such a complicated multidimensional campaign, as we're seeing at the moment, that small impact in a small number of seats could have an important role.”

UK NATIONAL PARLIAMENT ELECTION POLL OF POLLS

For more polling data from across Europe visit POLITICO Poll of Polls.

This all might explain why the Conservatives have been “so immensely modest” in their proposals, the IFS's Johnson said. “To do otherwise would either mean resiling from their pledge to balance the current budget or would mean being up front about the need for tax rises to avoid breaking that pledge.”

He also cast doubt over Labour’s plan to raise investment levels by £55 billion a year, saying the public sector does not have the capacity to “ramp up that much, that fast.”

Responding to the IFS analysis, Chancellor Sajid Javid said the Conservatives “have been very clear” with their spending commitments in this election.

“We have also clearly set out exactly how we are going to fund them," he said in a statement. "We have a very detailed costings document — the most detailed I would say that any party has published in any British election — so I’m very confident about that.”