LONDON (Reuters) -Prime Minister Keir Starmer said on Tuesday he would have to take unpopular decisions, raising the possibility of "painful" taxes on the wealthy and spending cuts to try to fix Britain's myriad of problems he blamed on Conservative misrule.

In a speech in the rose garden of his Downing Street office, the scene of COVID parties under a former Conservative government, Starmer promised to end politics as usual, telling voters he was levelling with them that Britain's problems would only get worse before getting better.

Elected in a landslide victory in July, Starmer has vowed to rebuild British society, saying this month's anti-migrant riots reflected divisions that have taken hold, stoked by what he described as the Conservatives' preference for populism.

He also blamed the last government for leaving him with a 22 billion pound ($29 billion) black hole, something he said was unexpected and which had forced him to take some difficult decisions such as limiting fuel payments to the elderly.

The opposition Conservative Party accuses Starmer's Labour Party of portraying the fiscal situation as much worse than it is so it can hike taxes after campaigning before the election on an agenda not to raise certain taxes on working people.

Starmer said he planned to stick to that pledge, but there would be short term pain in what he said would be "unpopular decisions" for the long term good.

"There is a budget coming in October, and it's going to be painful. We have no other choice ... Those with the broader shoulders should bear the heavier burden," he said in a speech to voters he met during the election campaign, referring to a fiscal statement due on Oct. 30.

"We have inherited not just an economic black hole but a societal black hole and that is why we have to take action and do things differently. Part of that is being honest with people about the choices we face and how tough this will be," he said.

"Frankly, things will get worse before we get better," he told the audience of apprentices, teachers, nurses, small business owners and firefighters.

The rose garden last made headlines after it was used by former Prime Minister Boris Johnson and his staff to hold parties during the COVID lockdowns, events that Starmer said had shattered the trust between the public and its politicians.

Conservative leadership contender, Kemi Badenoch, who is also the party's policy chief for housing and communities, said the speech was based on a "dishonest analysis".

"The truth is that Keir Starmer is managing voters' expectations for a decade of decline," she said in a statement.

PRISON PLACES

Starmer, a former director of public prosecutions, said he could not believe as prime minister he had to count available prison places to try to deal with those behind the riots that targeted Muslims and migrants.

"Not having enough prison places is about as fundamental a failure as you can get. And those people throwing rocks, torching cars, making threats, they didn't just know the system was broken, they were betting on it, gaming it," he said.

Starmer said the former Conservative government's failure to tackle problems, and its focus on the "snake oil" of populism, had widened divisions in society which would take time to heal.

He inherited an economy with sluggish growth, which is only now showing signs of improvement. Public sector net debt is at the highest since the early 1960s and the tax burden is on track to hit a near-80 year high.

Finance minister Rachel Reeves has said the projected public finances overspend means having to cut billions of pounds of spending.

"Those who made the mess should have to do their bit to clean it up," Starmer said, referring to the water regulator's new ability to place tough fines on companies responsible for allowing sewage into lakes and rivers.

"But just as when I responded to the riots, I'll have to turn to the country and make big asks of you as well, to accept short term pain for long term good, difficult trade off, but the genuine solution."

(Additional reporting by Kylie MacLellan, Suban Abdulla and Sam Tobin; Writing by Elizabeth Piper and Kate Holton; Editing by Andrew MacAskill and Alison Williams)

Starmer signals pain and 'unpopular decisions' to fix Britain

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