BRIGHTON, United Kingdom - British Treasury chief Alistair Darling said Monday that annual bonuses for bank executives will be outlawed in an attempt to curb excessive risk-taking in the country's huge financial sector.
Darling told the governing Labour Party's annual conference in Brighton, England that new legislation to restrict how the payments are made will be introduced in Parliament within weeks.
Leaders of the G20 group of rich and developing countries agreed last week to limit executive bonuses, but did not set specific caps. Darling said bankers in Britain will in the future be offered bonuses for their performance over several years, rather than over 12 months.
"We won't allow greed and recklessness to ever again endanger the whole global economy and the lives of millions of people," Darling said.
He told the conference that new laws would include a claw-back provision and help to "end the reckless culture that puts short term profits over long term success."
"It will mean an immediate end to automatic bank bonuses year after year, it will mean an end to immediate payouts for top management," Darling said.
The plans, to be included in a new business and financial services bill, will be formally proposed in November, when Brown's government sets out a legislative program for the next parliamentary session.
Darling told the rally that Britain's economy has not yet recovered from the financial crisis, but he predicted the country is likely to come out of recession by the end of the year.
"Germany, France and Japan are showing signs of growth. There are many independent forecasters now believing too that the U.K. is coming out of recession," he said. "I think it is too early to say so with total confidence."
Prime Minister Gordon Brown's Labour Party trails badly in polls. A national election must be called by next June.
Brown said Sunday that his party could recover if the economy rallies and the public gives him credit for averting a worse financial crisis.
"Electorally, we are in the fight of our lives," Business Secretary Peter Mandelson told the conference. "And, yes, we start that fight as underdogs."
Mandelson announced that Britain will extend a car-scrapping plan to cover an extra 100,00 cars and vans. The plan, similar to the cash for clunkers auto rebate program in the United States, offers discounts of 2,000 pounds (US$3,225) to new car buyers who trade in a model more than 10 years old.
In recent weeks, Brown has acknowledged that the government will need to cut public spending to reduce mounting government debt. But he has insisted the Labour Party will protect key services.
"Once we are through the recession - and only when this is clearly the case - we will tackle the deficit without eating into the fabric of people's lives," Mandelson said.
Darling said the main opposition Conservative Party, which is expected to win Britain's next election, would put the country's economic recovery at risk by making fast and sweeping cuts to spending.
"If we followed the Tory route now, recovery would be put at risk, prospects for growth damaged, borrowing would in the long run be greater. We cannot and must not let that happen," Darling said.