Sir Keir Starmer will this week warn of more pain to come as he claims that the state of modern Britain is 'worse than we ever imagined'.

In his first major speech since entering No 10, the Prime Minister will say that 'things will get worse before they get better'.

And he will claim as well as inheriting a £22 billion blackhole from the Tories, Labour had also been left a 'societal blackhole'.

But Sir Keir will vow not to 'shy away from making unpopular decisions' to restore the country, and fix the 'rot' left by the Tories.

Last night Labour sources denied that was code for punishing tax hikes expected in this Autumn's Budget, saying the PM was 'trying to be honest that the change people voted for will take time'.

However, Tory party chairman Richard Fuller accused the Prime Minister of 'fabricating' financial problems 'to con the public into accepting tax increases'. The PM's keynote speech will come one week before Parliament returns after its Summer recess.

It also comes with his Government accused of caving into the union barons by agreeing huge wage deals at the same time as it cuts winter fuel payments for 10 million pensioners. But Sir Keir justifies the pay deals, saying 'we've ended the strikes that have crippled our country for years.

'Because I defy anyone to tell me that you can grow an economy when people can't get to work – because the transport system is broken. Or can't return to work – because they're stuck on an NHS waiting list.'

The PM will also seek to link this Summer's riots with 14 years of 'populism' and Tory failures, claiming 'people torching cars, making threats' were exploiting the country's 'broken' system.

'They were betting on it. They were gaming it.'

Sir Keir also claims years of Tory failure – including 'not having enough prison spaces' – meant that dealing with this summer's riots was 'much harder' than tackling the 2011 disturbances when he was Director of Public Prosecutions.

To back up his claim that 'frankly, things will get worse before they get better', he will say: 'I didn't want to release prisoners early...

'But to be blunt, if we hadn't taken that difficult decision immediately, we wouldn't have been able to respond to the riots as we did.'

Boasting that 'we've done more in seven weeks than the last government did in seven years', he will accuse the Tories of 'still not being honest' about the £22billion black hole.

But last night, Tory chairman Mr Fuller dismissed the claim.

He said: 'Just two months in and Keir Starmer has taken winter fuel payments off 10 million pensioners, showered billions of taxpayers' money on his union paymasters and is now engulfed in a cronyism scandal after parachuting donors and supporters into top taxpayer funded jobs.'

Mr Fuller added: 'The soft-touch Labour Chancellor is squandering money whilst fabricating a financial black hole in an attempt to con the public into accepting tax rises, and literally leaving pensioners in the cold.

'The Prime Minister really should tell his Chancellor to reverse course or step in himself to reverse her decision.'