Sukuk

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Roger Williams Roger Williams Liberal Democrat, Brecon and Radnorshire 11:30 am, 5th November 2013

What his policy is on the issuing of Government bonds in the form of sukuk; and if he will make a statement.

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

The Government want the United Kingdom to become the first sovereign state outside the Muslim world to issue an Islamic bond. The Treasury is therefore working on the practicalities of issuing about £200 million of sovereign sukuk as early as next year. The Government see sukuk issuance as an excellent opportunity to promote London as the leading centre for Islamic finance.

Photo of Roger Williams Roger Williams Liberal Democrat, Brecon and Radnorshire

As chairman of the all-party group on Islamic finance and diversity in financial markets, I welcome the Government’s decision to issue a sukuk. It is something the group has campaigned on. I also congratulate the Government on their part in hosting the World Islamic Economic Forum in this country, the first time it has been held in a non-Muslim country. What else are the Government doing to promote Islamic investment in this country and sustain the Islamic banking sector?

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

I thank my hon. Friend for his continuing work in promoting Islamic finance and diversity in financial markets. London is already a global player in Islamic finance, which brings in significant investment and creates thousands of jobs. Last week I also announced that we are bringing together a global Islamic investment group. This group will have the expertise to help Islamic finance grow globally, as well as developing London as one of the leading centres for Islamic finance.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

May I also welcome what the Government have done? It will make this country the first anywhere in the western world to provide sharia-compliant bonds. We do not just want people to invest from outside, however. Although the last census showed that Brecon and Radnor had 116 Muslim people, I have 21,075 in my constituency. How does the Minister intend to sell those bonds to the people of Leicester East?

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

I thank the right hon. Gentleman for his warm words. Britain already has 20 banks offering Islamic financial products. We also have 49 sukuk listed on the London stock exchange, valued at over £25 billion, and 25 law firms that have significant Islamic practices. We will bring all this experience together to further develop Britain as an Islamic finance centre, and I am sure that will help his constituents with their investment decisions.