Financial Services: Islam

Treasury written question – answered on 22nd July 2019.

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Photo of Stephen Timms Stephen Timms Labour, East Ham

To ask the Chancellor of the Exchequer, what assessment the Government has made of the potential merits of using Islamic financial certificates, sukuk to finance infrastructure projects without adding to Government debt on the public sector balance sheet; and if he will make a statement.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

To ask the Chancellor of the Exchequer, what assessment the Government has made of the potential merits of using sukuk to finance infrastructure projects; and if he will make a statement.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The proceeds from the Sukuk, like the proceeds from the wider gilt programme, flow into the consolidated fund. This is used for general expenditure, including expenditure on infrastructure. The government considers the core gilt program rather than the Sukuk to be the most cost-effective way of raising money for expenditure, including that of infrastructure projects. The main purpose behind the decision to issue a second Sukuk is to reaffirm the government’s commitment to the UK being the Western hub for Islamic finance, whilst also providing high-quality liquid assets to UK-based Islamic banks.

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