Sir Keir Starmer has warned that Britain must face the "harsh light of reality" as he prepares voters for up to £35billion of additional taxes in the budget.
Speaking in Birmingham, the prime minister said his government would take "tough decisions", opting to raise taxes in order "to prevent austerity and rebuild public services".
Chancellor Rachael Reeves will deliver the budget on Wednesday and is expected to announce a series of tax rises including a raid on employer's national insurance contributions and a further freeze to income tax thresholds.
She will argue that this is necessary to end austerity in public services and fill a £22billion black hole in the public finances left by the Conservatives.
The Tories have since accused the prime minister of breaking Labour's election manifesto after they promised not to increase taxes on working people.
Ministers have since come under pressure to detail who would be covered by its promise not to raise taxes on working people.
In his speech, Mr Starmer told the audience: "the working people of this country know exactly who they are," adding that he would "protect the payslips of working people" who were "the golden thread" of the government's agenda.
It is not known what tax rises might be in the budget, but he repeatedly emphasised the need for "tough decisions."
"Nobody wants higher taxes, just like nobody wants public spending cuts," he said.
"But we have to be realistic about where we are as a country."