By Denise Marray

Gulf Times Correspondent
London

 In a speech made recently to the EU Islamic Finance and Banking Summit held in London, the Muslim Peer, Lord Sheikh, gave his perspective on Islamic Finance in the UK.  

Lord Sheikh is the first Conservative Muslim member of the House of Lords. He is patron of the Islamic Finance Council UK, and co-chair of the All Party Parliamentary Group for Islamic Finance and Diversity in Financial Markets.

His family roots are in Kashmir, but he was brought up in Uganda, where his father established a successful business having migrated from the sub-continent in 1921. However, under the tyrannical, racist regime of Idi Amin, the family had to flee Uganda in the 1970s. They arrived in the UK with no option but to start all over again from scratch.

“General Amin confiscated all our business in 1972.  My family arrived here as penniless refugees. General Amin snatched everything from us, but not our brains and determination,” he recalled.

Now in his seventies, he can reflect on a successful business and philanthropic career. He has first-hand experience of using Islamic finance in his own business ventures and promoting Islamic finance in the UK.

“I have owned and built successful businesses relating to insurance, financial services and properties, and I am the chairman of four companies. In my business career I have dealt with general insurances, life assurance and mortgages,” he said.

Today, he observed, “The UK is the biggest centre for Islamic Finance outside the Islamic world. The Shariah-compliant assets in United Kingdom exceed 18 billion dollars.”

He gave a snap shot of the global picture, pointing out: “With Islamic finance investments worldwide now worth over $1.8tn, and forecasted to grow to $2.5tn, Islamic finance presents an exciting high-growth market.”

Looking at Europe, he said: “There are now nearly 3mn Muslims in the United Kingdom and 20mn in Europe. In countries like France and Germany there are nearly 5mn Muslims in each country; Italy has over 1.5mn Muslims, The Netherlands over 1mn, and Austria over 500,000 Muslims.”

With regard to the UK, he said: “It is the British government’s intention to establish and maintain Britain as the gateway to international Islamic finance. The government would like to ensure that principles of fairness, collaboration and commitment will apply to Islamic financial arrangements, and is actively encouraging Shariah compliant transactions.

“The government has confirmed its intention to provide for Islamic student loans. Similar consideration has been given to introducing Sharia-compliant Start-Up Loans in the UK. The Prime Minister announced this at his Eid al-Adha reception last October.”

He commented:  “Islamic finance should not remain a niche, but through its appeal to everyone irrespective of religion, its market should be part of the mainstream market, increasing its potential manifold.”

He observed: “None of the Islamic banks globally were involved in the CDO’s and toxic derivative instruments which bought about the collapse of the banks such as Lehmans. The problems in the financial sector made people realise the importance of Islamic finance, which is based on ethical principles and transparency.”

He reflected that the UK’s ground-breaking sovereign Sukuk issued this year was more than 10 times oversubscribed and raised £200mn on orders totalling around £2.3bn.

The UK now has a number of universities providing courses in Islamic Finance; these include University of East London, Durham University, Dundee, CASS, Geenwich, Reading, Cambridge and Aston amongst others.

He referenced some of the significant investments in London funded wholly or in part by Islamic Finance, including high-profile Qatari investments.

“There have been investments in a new stadium for Arsenal Football Club and Etihad have invested in Manchester City. Other investments relate to The Shard, Thames Water, Harrods, Olympic Village and Chelsea Barracks,” he said.