The continued rise of Islamic finance in the UK

Despite the clear political will for the UK to become an Islamic finance hub, there are steep political challenges ahead.

At the ninth annual World Islamic Economic Forum in London on 29 October, David Cameron announced that he wants to see London standing shoulder-to-shoulder with Dubai and Kuala Lumpur as one of the great global centres of Islamic finance. In saying this, he declared that he intends Britain to become the first non-Muslim state to issue sukuk – Islamic bonds that are structured in such a way as they do not infringe upon Sharia law.

While the issue size is expected to be relatively modest – approximately £200m in the first instance – the announcement should rightfully be seen as a symbol of the square mile’s desire to capture a large share of the growing Islamic finance market. Few would dispute the wisdom of this move, for the growth of Islamic finance since the first sukuk was issued in Malaysia in 2000 has been very impressive.

The global Islamic economy, which includes the Islamic finance industry, is estimated to have a total value of $8 trillion. Sukuk have been used since their inception as a means for corporates and states to raise alternative financing. In light of the global crisis and liquidity squeeze, Islamic finance has grown exponentially. On this basis, it would be strange in a sense for London and other global financial centres not to try to gain some market share and we should expect announcements similar to that of Cameron’s from spokespeople in New York, Frankfurt, Paris, Hong Kong and Singapore.

The growth of Islamic finance is attributable to many different factors, but that growth would not have been possible without the development of the contemporary financing techniques or structures that underpin the industry. For this, sukuks today can be seen as a union between religious principles and modern financing techniques. One can understand the appeal of sukuk, particularly in light of the banking crisis that has gripped the Western world and beyond since 2008, for in some senses it can be seen as a more tangible investment than a conventional bond, because the sukuk owner has a stake in the underlying asset rather than a share of debt. So while a conventional bond holder essentially receives interest on a loan, the sukuk holder receives a share of profit derived from the commercial ventures of the business, rather than on interest (interest is strictly forbidden under Sharia law).

However, despite the clear political will for the UK to become an Islamic finance hub, there are undoubtedly challenges lying ahead. An obvious area of weakness is a lack of indigenous expertise in terms of awareness of the range of financial products on offer and the various structures that can be implemented to make finance initiatives Sharia-compliant. Although there are Islamic finance practices operating out of London, there is still a dearth of expertise. Furthermore, regulation standardising practices and giving confidence to borrowers will be required to grow the industry. However, these are not immutable, nor insurmountable, obstacles.

As uncertainty persists in certain parts of the global economy, it has created an opportunity for Islamic finance to continue to flourish and expand into new economies. The UK has put down a marker in aiming to be the first western nation to issue sukuk and such a move is to be welcomed by the markets and legal and financial services. If some of the challenges are removed then watch this space, for it would be a brave individual who discounts the possibility of further growth in this intriguing market. There are currently 50 sukuk listings on the London Stock Exchange – expect many more to come.

Left to right: Hamid Karzai, Hassanal Bolkiah, Najib Razak, David Cameron, King Abdullah II, Prince Salman bin Hamad al-Khalifa and Atifete Jahaga at the 9th World Islamic Economic Forum in London. Photograph: Getty Images.

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25 times people used Brexit to attack Muslims since the EU referendum

Some voters appear more interested in expelling Muslims than EU red tape.

In theory, voting for Brexit because you were worried about immigration has nothing to do with Islamophobia. It’s about migrant workers from Eastern Europe undercutting wages. Or worries about border controls. Or the housing crisis. 

The reports collected by an anti-Muslim attack monitor tell a different story. 

Every week, the researchers at Tell Mama receive roughly 40-50 reports of Islamophobic incidences.

But after the EU referendum, they recorded 30 such incidents in three days alone. And many were directly related to Brexit. 

Founder Fiyaz Mughal said there had been a cluster of hate crimes since the vote:

“The Brexit vote seems to have given courage to some with deeply prejudicial and bigoted views that they can air them and target them at predominantly Muslim women and visibly different settled communities.”

Politicians have appeared concerned. On Monday, as MPs grappled with the aftermath of the referendum, the Prime Minister David Cameron stated “loud and clear” that: “Just because we are leaving the European Union, it will not make us a less tolerant, less diverse nation.”

But condemning single racist incidents is easier than taking a political position that appeases the majority and protects the minority at the same time. 

As the incidents recorded make clear, the aggressors made direct links between their vote and the racial abuse they were now publicly shouting.

The way they told it, they had voted for Muslims to “leave”. 
 
Chair of Tell Mama and former Labour Justice and Communities Minister, Shahid Malik, said:

“With the backdrop of the Brexit vote and the spike in racist incidents that seems to be emerging, the government should be under no illusions, things could quickly become
extremely unpleasant for Britain’s minorities.

“So today more than ever, we need our government, our political parties and of course our media to act with the utmost responsibility and help steer us towards a post-Brexit Britain where xenophobia and hatred are utterly rejected.”

Here are the 25 events that were recorded between 24 and 27 June that directly related to Brexit. Please be aware that some of the language is offensive:

  1. A Welsh Muslim councillor was told to pack her bags and leave.
  2. A man in a petrol station shouted: "You're an Arabic c**t, you're a terrorist" at an Arab driver and stated he “voted them out”. 
  3. A Barnsley man was told to leave and that the aggressor’s parents had voted for people like him to be kicked out.
  4. A woman witnessed a man making victory signs at families at a school where a majority of students are Muslim.
  5. A man shouted, “you f**king Muslim, f**king EU out,” to a woman in Kingston, London. 
  6. An Indian man was called “p**i c**t in a suit” and told to “leave”.
  7. Men circled a Muslim woman in Birmingham and shouted: “Get out - we voted Leave.”
  8. A British Asian mother and her two children were told: "Today is the day we get rid of the likes of you!" by a man who then spat at her. 
  9. A man tweeted that his 13-year-old brother received chants of “bye, bye, you’re going home”.
  10. A van driver chanted “out, out, out”, at a Muslim woman in Broxley, Luton
  11. Muslims in Nottingham were abused in the street with chants of: “Leave Europe. Kick out the Muslims.”
  12. A Muslim woman at King’s Cross, London, had “BREXIT” yelled in her face.
  13. A man in London called a South Asian woman “foreigner” and commented about UKIP.
  14. A man shouted “p**i” and “leave now” at individuals in a London street.
  15. A taxi driver in the West Midlands told a woman his reason for voting Leave was to “get rid of people like you”.
  16. An Indian cyclist was verbally abused and told to “leave now”. 
  17. A man on a bike swore at a Muslim family and muttered something about voting.
  18. In Newport, a Muslim family who had not experienced any trouble before had their front door kicked in.
  19. A South Asian woman in Manchester was told to “speak clearly” and then told “Brexit”. 
  20. A Sikh doctor was told by a patient: “Shouldn’t you be on a plane back to Pakistan? We voted you out.”
  21. An abusive tweet read: “Thousands of raped little White girls by Muslims mean nothing to Z….#Brexit”.
  22. A group of men abused a South Asian man by calling him a “p**i c**t” and telling him to go home after Brexit.
  23. A man shouted at a taxi driver in Derby: "Brexit, you p**i.”
  24. Two men shouted at a Muslim woman walking towards a mosque “muzzies out” and “we voted for you being out.”
  25. A journalist was called a “p**i” in racial abuse apparently linked to Brexit.