David Cameron promises to make UK a global centre for Islamic finance at the 9th WIEF event in London
Islamic investment is "already fundamental" to the success of the UK economy, Prime Minister David Cameron said as he unveiled a number of efforts to encourage Muslim money onto the country's shores.
Among those is the first ever sovereign sukuk - an Islamic bond - to be issued by a government in the non-Muslim world; the creation of a new indices on the London Stock Exchange which makes it easier to identify Shariah-compliant investments; as well as cash to help upskill and finance small firms across the Middle East and Gulf.
"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," Cameron told leaders and heads of state from Muslim countries at the 9th World Islamic Economic Forum in London, the first time the event has been held outside of the Muslim world.
"When Islamic finance is growing 50% faster than traditional banking and when global Islamic investments are set to grow to £1.3tn by 2014 we want to make sure a big proportion of that new investment is made here in Britain.
"I know some people look at foreign companies investing in our businesses, financing our infrastructure or taking over our football clubs and ask - shouldn't we do something to stop it? Well, let me tell you, the answer is no."
Cameron continued: "One of Britain's unique selling points is its openness and this openness is a vital part of how we ensure our country is a great success story in the global race.
"Foreign investment creates wealth, jobs and growth and, far from weakening our industrial base, that investment actually strengthens it."
He highlighted investments such as in the £400m Battersea Power Station development by Malaysia and Qatar's construction of The Shard skyscraper as examples of how Islamic money is financing the UK economy.
'No More Exclusion for UK Muslims'
Cameron also pledged to make the UK a more accommodating environment for Muslims by doing more to ensure the Islamic finance infrastructure is in place.
"We have already removed the double tax on Islamic mortgages and extended tax relief on Islamic mortgages to companies as well as individuals, and 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," he said.
"Let me be clear what this means. Never again should a Muslim in Britain feel unable to go to university because they cannot get a Student Loan - simply because of their religion.
"Never again should a Muslim in Britain feel unable to go to start a business because they cannot get a Start-up Loan - simply because of their religion.
"The message is simple: 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."
London's Deputy Mayor Sir Edward Lister has already spoke of the ambition to make the English capital a hub for Islamic finance.
A task force on building the UK's Islamic finance industry has been at work since early 2013.
"The task force has just started and its aim is to make it easier for banks in London to have Islamic products, which is still quite a new concept to any of them," Lister told a press conference in September during his trip to Malaysia.
"Only now people are beginning to understand what the products actually mean and how they comply ... What you will see is a lot of companies introducing those products."
London could capture a trillion pounds' worth of the burgeoning global Islamic finance market, according to a Shariah-compliant asset management firm in the city.
Ethical Asset Management Chief Executive Saadat Khan said the UK could lure the lucrative Islamic investment by encouraging a market with truly Shariah-compliant financial products, because much of what is on offer at the moment does not suit Muslim investors' strict requirements.
"There are tens of billions of dollars looking for a suitable home that are doing nothing at present due to the structured nature of many Shariah-products currently available on the market," said Khan, whose firm was the UK's first Shariah-based asset manager when it was created in 2010.
"Several of these are described as Shariah-compliant or even Shariah-inspired. However, a significant number of investors are not interested in them because they are very similar to conventional products in all but name."
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