Sir Keir Starmer has said he wants to reduce the number of people going to prison through renewed efforts to cut reoffending.
In his first press conference as prime minister, Sir Keir said too many people found themselves back in jail "relatively quickly" after being sent there.
He added that intervening to prevent young people committing knife crime would be an early priority for his new government.
But he said there would be no "overnight solution" to prison overcrowding, adding: "We’ve got too many prisoners, not enough prisons."
It comes after he appointed a businessman as his prisons minister who has previously said only a third of prisoners should be there.
James Timpson, boss of the shoe repair chain which has a policy of recruiting ex-offenders, said in an interview with Channel 4 earlier this year that "we're addicted to punishment”.
Labour, which won a landslide general election victory on Thursday, has promised to review sentencing after regaining office for the first time since 2010.
It has also inherited a ballooning crisis in Britain's jails, and has already committed to keeping the previous Conservative government's early release scheme in place to ease current levels of overcrowding.
Last week the Prison Governors’ Association, which represents 95% of prison governors in England and Wales, warned that jails were due to run out of space within days.
Tory ex-justice secretary Alex Chalk first announced plans to release prisoners early in October 2023.
Mr Chalk, who lost his seat to the Lib Dems in the general election, told MPs at the time the "prison population is greater than it has ever been" and the UK "must use prison better".
However, he added: "We must do whatever it takes to always ensure there are always enough prison places to lock up the most dangerous offenders to keep the British public safe."
Details of Labour's review are yet to be unveiled, but Mr Timpson's appointment has offered an early signal that a change of approach may be on the cards in this area.
Sir Keir has appointed him a member of the House of Lords, allowing him to take up a post as prisons minister at the Ministry of Justice.
The businessman told a Channel 4 podcast in February that prison was a "disaster" for around a third of prisoners, and another third "probably shouldn’t be there".
He said too many people being in prison for "far too long" was an example of "evidence being ignored because there is this sentiment around punish and punish”.
"We’re addicted to sentencing, we’re addicted to punishment," he added.
Starmer: We have too many prisoners
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