30 OCT 2013 Prime Minister’s announcements on Islamic finance

Over the last week, the Prime Minister has made two announcements which demonstrate the Government’s commitment to ensuring that Muslims are not excluded from the financial system due to their faith, and to ensuring that Britain remains the leading country for international Islamic finance outside the Organisation for Islamic Cooperation (OIC) countries.

On Monday 21 October 2013 the Prime Minister hosted an Eid reception at No. 10 Downing Street at which the Conservative Muslim Forum were well represented. During his speech he said:

I want Britain to be one of the world centres of Islamic finance. And that should go from the highest and most mightiest financial institution all the way to things like start-up loans that we have introduced and are fantastically successful – we’ve got tens of thousands of young people taking them on and starting up their own businesses.

And tonight I can announce that we will make sure that there is a type of start-up loan that is totally consistent with all the principles of Islamic finance. We must do that for start-up loans, we must do it for student loans, we must do it for enterprise allowances and for all of those things. That’s what a welcoming, tolerant, multi-racial country does.

For the full text of the PM’s speech click here.

Yesterday the Prime Minister opened the World Islamic Economic Forum in London. This is the first time that the WIEF has been held outside an OIC country. During his speech, he made the following announcment about a UK sovereign sukuk.

This government wants Britain to become the first sovereign outside the Islamic world to issue an Islamic bond.

So the Treasury is working on the practicalities of issuing a bond-like sukuk worth around £200 million and we very much welcome the involvement of industry in developing this initiative which we hope to launch as early as next year.

A sukuk is the Islamic finance instrument that corresponds to a tradable bond. See the Wikipedia article on sukuk.

The Prime Minister also mentioned in his speech a number of other developments in Islamic finance in the UK. To read the full text click here.

The Conservative Muslim Forum is delighted by these announcements. As well as demonstrating the Government’s commitment to financial inclusion and the competitiveness of London, the two speeches also recognise the contribution that Muslims are making to British society.

The CMF’s Deputy Chairman Mohammed Amin is an expert on Islamic finance and yesterday, in a purely personal capacity, wrote the linked article on the ConservativeHome website welcoming the announcement. He has also provided, again in a purely personal capacity, a simple explanation of what a sukuk is.

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