WIREDGOV

• the government would like the UK to become the first country outside of the Islamic world to issue an Islamic bond; the Treasury is working on the practicalities of issuing a bond-like Sukuk worth around £200 million, which we hope to launch as early as next year
• London Stock Exchange is creating a new way of identifying Islamic finance opportunities by launching a world-leading Islamic Market Index; strengthening FTSE’s leading position as a developer of innovative, alternatively-weighted indices, this index will be another global first for the City of London
• the UK government is partnering with the Shell Foundation to create a new £4.5 million grant to boost the work of the Nomou initiative - a growth fund that provides skills and finance to small businesses across the Middle East and the Gulf, which will provide opportunities for British companies in the longer-term.

Time and again London has adapted and evolved first to welcome new investment and provide new ways of doing business. Already London is the biggest centre for Islamic finance outside the Islamic world. And today our ambition is to go further still. Because I don’t just want London to be a great capital of Islamic finance in the Western world, I want London to stand alongside Dubai as one of the great capitals of Islamic finance anywhere in the world.

There are some countries which naturally look inwards, pull up the drawbridge and refuse to recognise that the way the world is changing affects their future success. But Britain will not make that mistake.

“We know we are in a global race for our economic future so we are backing our businesses, seeking new markets and banging the drum for Britain to show we are a first class destination for trade and investment.

When Islamic finance is growing 50% faster than traditional banking and when global Islamic investments are set to grow to £1.3 trillion by 2014 we want to make sure a big proportion of that new investment is made here in Britain. I know some people look at foreign companies investing in our businesses or taking over our football clubs and ask – shouldn’t we do something to stop it? Well, let me tell you, the answer is “no.” One of Britain’s great USPs is its openness and this openness is a vital part of how we ensure our country is a great success story in the global race. Foreign investment creates wealth, jobs and growth.

And far from weakening our industrial base, that investment actually strengthens it.

For years people have been talking about creating an Islamic bond – or Sukuk – outside the Islamic world. But it’s just never quite happened. Changing that is a question of pragmatism and political will. And here in Britain we’ve got both. This government wants Britain to become the first Western sovereign 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.

The growth of Islamic finance means that there is an increasing demand for new ways of identifying Islamic compliant business activities. Again the City of London is leading the way – this time not just in Europe, but right across the world. Today the London Stock Exchange is announcing the creation of new indices. These not only identify companies that meet traditional Islamic investment principles but also use the most advanced techniques on the planet to screen financial ratios and enable investors to identify opportunities with lower volatility. In plain language, this means the creation of a new way of identifying Islamic finance opportunities - a world-leading Islamic Market Index. It is another global first for the City of London.

• there are already more than 20 banks in the UK that offer Islamic financial products and services, more than in any other Western country
• the London Stock Exchange is an attractive draw for Islamic finance listing with over 49 Sukuk (an Islamic bond which pays investors a fixed return based on the profit generated by an underlying asset) listings valued at US$ 34 billion over the last 5 years
• 25 law firms in the UK operating substantial Islamic finance departments for the global and domestic markets
• Islamic finance has also helped transform London’s skyline by financing in whole or in part developments such as The Shard, Chelsea Barracks and the Olympic Village