LONDON, 15 June 2006 — The Blair government has “a long-term ambition to make Britain the gateway to Islamic finance and trade ... one I believe Britain is well placed to realize,” said UK Chancellor of the Exchequer Gordon Brown yesterday at the opening session of the Islamic Finance and Trade Conference here.
Brown’s keynote address was made in the presence of OIC secretary general Ekmelleddin Ihsanoglu and Islamic Development Bank President Ahmad Mohamed Ali, and dignitaries and representatives of the financial community in the UK.
“Islam is Britain’s second-largest faith, and Muslims are involved in every walk of British life,” said Brown. “I have come to see just how much British Muslims make a huge contribution to this country’s success — to our prosperity, our society and our culture.
It is a fact that business creation is higher in the Muslim community than in many other sections of our society.”
UK trade with the Arab world has increased 60 percent in the last five years while at the same time UK exports to Indonesia, Malaysia, Pakistan and Bangladesh grew to nearly three billion pounds in 2005 and to North Africa to over one billion pounds.
The UK is also the second-largest investor after the US in Saudi Arabia and Pakistan. Brown also pledged that the government would do what it can do to secure the completion of the negotiations of a free trade agreement between the EU and the Gulf Cooperation Council.
The government, he stressed, wants to see Britain’s strong economic ties with Muslim countries strengthen still further.
The chancellor suggested several ways the government could realize this ambition of making Britain the gateway to Islamic trade and finance.
“First,” he said, “we must together strengthen Britain’s own trading links with Muslim countries. In the budget this year, I announced proposals for a revamped UK trade and investment and new targets for expanding trade with emerging economies.” In this context Britain has trade offices in 35 Muslim countries.
Second, the foundation for making Britain the gateway to Islamic trade, he suggested “is to make Britain the global center for Islamic finance.”
Today, he continued, “British banks are pioneering Islamic banking — London now has more banks supplying services under Islamic principles than any other Western financial center. British professional services firms are leading the way in Islamic business services — with English commercial law now the law of choice.”
Brown has facilitated the introduction of Islamic mortgages three years ago through the abolition of double stamp duty for such mortgages. Already mortgages providers are talking about a potential UK market for Islamic mortgages of over half a billion pounds. The treasury last year introduced measures to facilitate Islamic savings and borrowing and providing proper consumer protection for Ijara products.
For commercial mortgages and property deals, last week, the UK Parliament, rectified measures in the finance bill for diminishing musharaka and wakala contracts.
Currently, according to Brown, the Treasury is working with the sector “to look at international finance, Islamic securitization and sukuk — and I am pleased that London was the financial centre chosen recently to advise on one of the largest sukuk deals ever done.”
All these changes are vital, stressed Brown, to increasing trade with Muslim countries and making London the location of choice for Islamic investment, but they are also vital to ensuring the Muslim community in Britain can trade, build successful businesses and create jobs. In this context also, the government welcomes the development of Shariah compliant business finance products — such as Business Finance North West’s Ethical Fund — enabling Muslim entrepreneurs to generate the capital they need for a business start-up or expansion.
