Cameron on why London wants to be a great capital of Islamic finance
Tuesday, 5 November 2013 00:16
This is the first time that the World Islamic Economic Forum has ever been held outside the Islamic world.
Already London is the biggest centre for Islamic finance outside the Islamic world. But today our ambition is to go further still. I want London to stand alongside Dubai and Kuala Lumpur as one of the great capitals of Islamic finance anywhere in the world.
My argument today is very simple: investing in London is good for you and opening London up to your investment is good for us.
Best place in the world for new entrepreneurs
Ernst and Young now say Britain is the best place in the world for new entrepreneurs. Today the World Bank has recognised that we have improved access to credit, improved protection for investors, simplified the tax burden and made it easier and faster to register property.
And we are already taking big steps to open up the City of London to more Islamic finance. Today we have more banks compliant with the principles of Islamic finance than any other Western country. We have over 25 law firms supplying services in Islamic finance and 16 universities or business schools offering MBAs or similar qualifications in Islamic finance, including the new program for senior executives announced by Cambridge University last week.
Nowhere else in the world offers the same depth and breadth of education and qualifications in Islamic finance. Just last week we made new commitments to open up new forms of student loans and business start-up loans for Islamic students and entrepreneurs.
Britain ready to welcome your investment
Britain is a country ready to welcome your investment, a country that values your friendship and a country which will never exclude anyone because of their race, religion, colour or creed. But if investing in London is good for you, then opening up London to your investment is just as vital for our own success here in Britain. 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.
Islamic investment fundamental to our success
Islamic investment is already fundamental to our success. We are proud that DP World are building one of Europe’s biggest ports – the London Gateway - right here in the Thames. We are proud that Qatari investment is constructing the tallest building in Europe – the Shard, right here in the City of London.
We are proud that Emirates invested in a new stadium for Arsenal and Etihad have invested in Manchester City. And we are proud of Malaysia’s £400 million investment in Battersea Power Station and Masdar’s 20% investment in London Array Offshore Wind.
We welcome the fact that Thames Water, Barclays, Sainsburys, Harrods and the Olympic Village are all financed in part by Islamic investors. And we welcome the fact that Qatari Diar’s investment in Chelsea Barracks represents the largest Islamic finance deal anywhere in Europe in history and that work is commencing on the site in November.
Much more to do to reach full potential
But we’re not going to sit here and rest on our laurels. We know there is much more to do for London to reach its full potential as a great world centre of Islamic finance.
This government wants Britain to become the first sovereign outside the Islamic world 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. Today the London Stock Exchange Group is announcing the creation of new indices.
These not only identify companies that meet traditional Islamic investment principles but also use some of 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.
New steps to support new businesses
Britain is today taking new steps to support new businesses to grow across the Islamic world. 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. This fund is open to investors who are looking for both a financial and a social return on their money. And we welcome private investors, companies and governments from across the Islamic world joining us in this exciting new venture.
Those are just three of the ways in which we are taking bold new steps to make London one of the greatest centres for Islamic finance anywhere in the world. Over the coming years, I hope we will see billions of pounds of new investments in a range of sectors where the UK excels – from property and housing to aerospace and life sciences. New investments in London that are right for you. New investments in London that are right for us. And above all new investments that are possible because of the unique openness of the City of London and because of our commitment to help London lead the way in Islamic finance across the world, just as it has led the way in global finance across the ages.