UK to issue "Islamic Bonds"

Daily Mail:

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 Government has already backed Islamic car loans and mortgages.

Sharia-compliant bonds were designed to get round the ban on paying interest – "riba" in Islamic law.

The Koran says it is sinful to make money from money.

Unlike a conventional bond which is debt-based, a "sukuk" is asset-based. Instead of receiving interest, bond holders receive "rent" on the asset, thereby complying with sharia law.

...

It appears to be a lease financing scheme. I suspect that God would see through the scam and recognize it for what it is.

This appears to be a politically risky business deal for the UK government with the people still upset with the Archbishop of his Shari'a law gaffe.

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