New Sharia Row over Chancellor’s Plans for “Islamic Bonds”
By Simon Walters
18:08pm on 17th February 2008
A new sharia law controversy erupted last night over Government plans to issue special “Islamic bonds” to pay for Gordon Brown’s public-spending programme by raising money from the Middle East.
Britain is to become the first Western nation to issue bonds approved by Muslim clerics in line with sharia law, which bans conventional loans involving interest payments as “sinful”.
The scheme would mark one of the most significant economic advances of sharia law in the non-Muslim world.
It will lead to the ownership of Government buildings and other assets currently belonging to British taxpayers being switched wholesale to wealthy Middle-Eastern businessmen and banks.
The Government sees sharia-compliant bonds as a way of tapping Middle-East money and building bridges with the Muslim community.
But critics say the scheme would waste money and could undermine Britain’s financial and legal systems.
Senior Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said: “I am concerned about the signal this would send ” “ it could be the thin end of the wedge.
“British Common Law must be supreme and should apply to everyone.”
A spokesman for the National Secular Society said: “There are lots of different ways to arrange financing.
“Constructing financial instruments to be sharia-compliant seems to me to involve a lot of unnecessary complication, which will serve only to make a lot of lawyers very rich.”
The attempt to embrace Islamic financing would also appear to be at odds with Mr Brown’s promise to promote Britishness and British values and institutions.
The Treasury has already faced heavy criticism for removing Britannia from 50p coins.
Other Western nations have been reluctant to issue Islamic bonds.
In the United States the bonds are banned partly as a result of claims that the money could be linked to terrorism.
The Treasury proposal follows the heated debate over the Archbishop of Canterbury Dr Rowan Williams’s claim that the spread of elements of sharia law in parts of Britain was “inevitable”.
Downing Street distanced Gordon Brown from Dr Williams’s comments.
A spokesman said: “The Prime Minister is very clear that British laws must be based on British values and that religious law, while respecting other cultures, should be subservient to British criminal and civil law.”
However, The Mail on Sunday has established that Chancellor Alistair Darling is ready to give the go-ahead to sharia-compliant bonds ” “ known as “sukuk”, an early Arabic form of cheque.
Treasury officials have been working behind the scenes for months on the plan.
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