Darling: "We want to encourage long term growth and commitment"
UK Chancellor Alistair Darling has denied that the UK has changed its view on bank bonuses.
UK Prime Minister Gordon Brown said in a joint letter with the heads of the French and German governments that they must explore ways to "limit" bonuses.
But Mr Darling said earlier this week that the French plan to cap bonuses would be "unworkable".
He told the BBC that the prime minister was merely showing the UK was prepared to work with other countries.
Shadow chancellor George Osborne said that Labour's "confusion" about its economic policy was threatening the economy.
"It's further evidence of the growing tension between Number 10 and Number 11 [the prime minister and chancellor] that could do so much damage to our economic recovery," he said.
Finance ministers are poised to meet in London later, ahead of a meeting of the Group of 20 richest nations in Pittsburgh later this month. Bonuses are expected to be high on their agendas.
Mr Brown, in a letter also signed by French President Nicolas Sarkozy and German Chancellor Angela Merkel, suggested his views on the issue of bonuses had relaxed.
"We should explore ways to limit total variable remuneration in a bank either to a certain proportion of total compensation or the bank's revenues and/or profits," they said.
"The abatement of financial tensions has led some financial institutions to imagine they can return to the same modes of action prevalent before the crisis. This is not an option," the letter added.
That appeared to contrast with previous comments from Mr Brown that he did not favour capping bonuses.
His comments suggested that he preferred finding mechanisms where banks could "claw back" bonuses if the bank later performed poorly.
"Gordon Brown is signalling that we are ready to work with other countries, but what we're really focused on, are practical proposals," Mr Darling said in an interview with the BBC's economics editor, Stephanie Flanders.
Shadow chancellor George Osborne said: "Yesterday Gordon Brown signed a letter promising to explore bonus caps, and today Alistair Darling says those caps are unworkable."
"It's further evidence of the growing tension between Number 10 and Number 11 that could do so much damage to our economic recovery."
Mr Darling said he thought the US, where there has also been a backlash over bonuses, would take the same view as the UK government.
If you cap bankers' bonuses, banks will either "jack up" their basic salary or go elsewhere, he said.
"For this to work, you have to get global agreement because all these banks are multinational," he said.
France is proposing a series of mandatory caps on bonuses - which the head of the Eurogroup of eurozone finance ministers, Luxembourg's Jean-Claude Juncker, said he "totally supported".
Mr Darling said that the UK favoured measures designed to make sure banks had higher capital reserves and were geared more to long-term growth.
"Inevitably, different countries will present different solutions," Mr Darling said.
In August, the UK's financial regulator, the Financial Services Authority, unveiled a new code that stated bonuses should not be guaranteed for more than a year.
Senior employees should have their bonuses spread over three years under the code, which is due to take effect from January 2010.
The new rules to to link pay more closely with the long-term profitability of banks, are designed to address concerns that big bonuses led to excessive risk-taking at banks which contributed to the financial crisis.
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