The new lord chancellor has pledged that Labour will create a noticeably different justice system – but admitted that ‘difficult’ conversations are ongoing with the Treasury about how to fund it.

Shabana Mahmood told a fringe event at the Labour conference in Liverpool that the government would ‘restore and reform’ justice.

Mahmood agreed with the suggestion that more funding was the answer to fixing many of the problems afflicting the system and said that talks were ongoing ahead of the spending review next month. But she warned people not to expect the government to announce any major spending commitments despite her own misgivings about justice issues.

‘We are not a party of austerity and we do not believe in running a smaller state – we have not come in to cut the size of the state,’ she said. ‘[But] we have to make difficult choices in this early period and go for growth. We believe in public services and funding public services and we want to go further but when the economic circumstances allow us to do so.’

Despite investment in the short term likely to be no greater than the Conservative administration, Mahmood said there were already clearing dividing lines between the parties on justice.

‘The other lot saw justice as expendable as a department and a set of services that could be cut and nobody would notice,’ she told the event, run by thinktank the Society of Labour Lawyers. ‘That is not the position of the Labour Party, not our values and not who we are as a political party. We will do things differently. We signalled almost immediately upon our entry into government that the rule of law was back and the government doesn’t get to trash the law – that is a statement of intent and you can take confidence from that.’

Mahmood did not go into detail about potential justice reforms but said the actions taken to ease the prisons crisis were not the limit of her ambition, and she had taken the role of lord chancellor to achieve much more. She added that she was ‘in for the long haul’ and that she wanted to stay as justice secretary for the length of this parliament.

Speaking on the same panel, attorney general Lord Hermer KC said the new government should make it a priority to explain to the public why the rule of law and human rights matter, saying the party needed to be ‘militant’ about promoting both and ‘shouting it from the rooftops’.

Hermer added: ‘The human rights framework is one we should not apologise for or seek to make excuses for.’