Asked by: Callum Anderson (Labour - Buckingham and Bletchley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the adequacy of UK financial markets infrastructure to support further issuances of Islamic financial instruments.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The UK is the leading Western destination for Islamic finance businesses. The Islamic finance sector also has a role in the overall UK financial ecosystem by providing sharia-compliant products for the UK’s Muslim population as well as its contribution to the UK’s competitiveness as an Islamic finance hub.
The Government aims to build the right environment to allow businesses to capitalise on growth opportunities in the UK and also promotes the UK’s capabilities and expertise overseas. For example, the Economic Secretary to the Treasury visited the UAE and Saudi Arabia in February 2025 and attended the UK-Saudi Arabia GREAT FUTURES Leadership Summit in September 2025.
The Government is considering opportunities to support the Islamic finance sector through UK trade agreements with partners which have significant domestic markets for shariah-compliant finance, such as the Gulf Cooperation Council.
The UK's two sovereign sukuk issuances have been successful in providing a platform for and helping to maintain the UK’s position as the leading western hub for Islamic finance while also supporting the UK’s Islamic banks. Given the development of the sector in the last decade and the relatively high cost of issuing sukuk, the Government is not at this time planning to issue another Sukuk after the current Sukuk matures in summer 2026.
Officials continue to engage with industry and international partners to explore opportunities for synergies between Islamic finance and the sustainability agenda.
Islamic financial instruments are covered under the same legislative and regulatory framework as their conventional equivalents, and the Government works to address any unintended differences that may arise.
Asked by: Callum Anderson (Labour - Buckingham and Bletchley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps her Department is taking to promote UK-based Islamic finance capabilities in international markets.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The UK is the leading Western destination for Islamic finance businesses. The Islamic finance sector also has a role in the overall UK financial ecosystem by providing sharia-compliant products for the UK’s Muslim population as well as its contribution to the UK’s competitiveness as an Islamic finance hub.
The Government aims to build the right environment to allow businesses to capitalise on growth opportunities in the UK and also promotes the UK’s capabilities and expertise overseas. For example, the Economic Secretary to the Treasury visited the UAE and Saudi Arabia in February 2025 and attended the UK-Saudi Arabia GREAT FUTURES Leadership Summit in September 2025.
The Government is considering opportunities to support the Islamic finance sector through UK trade agreements with partners which have significant domestic markets for shariah-compliant finance, such as the Gulf Cooperation Council.
The UK's two sovereign sukuk issuances have been successful in providing a platform for and helping to maintain the UK’s position as the leading western hub for Islamic finance while also supporting the UK’s Islamic banks. Given the development of the sector in the last decade and the relatively high cost of issuing sukuk, the Government is not at this time planning to issue another Sukuk after the current Sukuk matures in summer 2026.
Officials continue to engage with industry and international partners to explore opportunities for synergies between Islamic finance and the sustainability agenda.
Islamic financial instruments are covered under the same legislative and regulatory framework as their conventional equivalents, and the Government works to address any unintended differences that may arise.
Asked by: Callum Anderson (Labour - Buckingham and Bletchley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the UK’s Islamic finance sector on the Government’s objective of strengthening the UK’s position as a leading global financial centre.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The UK is the leading Western destination for Islamic finance businesses. The Islamic finance sector also has a role in the overall UK financial ecosystem by providing sharia-compliant products for the UK’s Muslim population as well as its contribution to the UK’s competitiveness as an Islamic finance hub.
The Government aims to build the right environment to allow businesses to capitalise on growth opportunities in the UK and also promotes the UK’s capabilities and expertise overseas. For example, the Economic Secretary to the Treasury visited the UAE and Saudi Arabia in February 2025 and attended the UK-Saudi Arabia GREAT FUTURES Leadership Summit in September 2025.
The Government is considering opportunities to support the Islamic finance sector through UK trade agreements with partners which have significant domestic markets for shariah-compliant finance, such as the Gulf Cooperation Council.
The UK's two sovereign sukuk issuances have been successful in providing a platform for and helping to maintain the UK’s position as the leading western hub for Islamic finance while also supporting the UK’s Islamic banks. Given the development of the sector in the last decade and the relatively high cost of issuing sukuk, the Government is not at this time planning to issue another Sukuk after the current Sukuk matures in summer 2026.
Officials continue to engage with industry and international partners to explore opportunities for synergies between Islamic finance and the sustainability agenda.
Islamic financial instruments are covered under the same legislative and regulatory framework as their conventional equivalents, and the Government works to address any unintended differences that may arise.
Asked by: Callum Anderson (Labour - Buckingham and Bletchley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential contribution of Islamic finance to achieving the Government’s green finance and sustainability objectives.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The UK is the leading Western destination for Islamic finance businesses. The Islamic finance sector also has a role in the overall UK financial ecosystem by providing sharia-compliant products for the UK’s Muslim population as well as its contribution to the UK’s competitiveness as an Islamic finance hub.
The Government aims to build the right environment to allow businesses to capitalise on growth opportunities in the UK and also promotes the UK’s capabilities and expertise overseas. For example, the Economic Secretary to the Treasury visited the UAE and Saudi Arabia in February 2025 and attended the UK-Saudi Arabia GREAT FUTURES Leadership Summit in September 2025.
The Government is considering opportunities to support the Islamic finance sector through UK trade agreements with partners which have significant domestic markets for shariah-compliant finance, such as the Gulf Cooperation Council.
The UK's two sovereign sukuk issuances have been successful in providing a platform for and helping to maintain the UK’s position as the leading western hub for Islamic finance while also supporting the UK’s Islamic banks. Given the development of the sector in the last decade and the relatively high cost of issuing sukuk, the Government is not at this time planning to issue another Sukuk after the current Sukuk matures in summer 2026.
Officials continue to engage with industry and international partners to explore opportunities for synergies between Islamic finance and the sustainability agenda.
Islamic financial instruments are covered under the same legislative and regulatory framework as their conventional equivalents, and the Government works to address any unintended differences that may arise.
Asked by: Callum Anderson (Labour - Buckingham and Bletchley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential merits of expanding the UK’s sovereign sukuk programme.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The UK is the leading Western destination for Islamic finance businesses. The Islamic finance sector also has a role in the overall UK financial ecosystem by providing sharia-compliant products for the UK’s Muslim population as well as its contribution to the UK’s competitiveness as an Islamic finance hub.
The Government aims to build the right environment to allow businesses to capitalise on growth opportunities in the UK and also promotes the UK’s capabilities and expertise overseas. For example, the Economic Secretary to the Treasury visited the UAE and Saudi Arabia in February 2025 and attended the UK-Saudi Arabia GREAT FUTURES Leadership Summit in September 2025.
The Government is considering opportunities to support the Islamic finance sector through UK trade agreements with partners which have significant domestic markets for shariah-compliant finance, such as the Gulf Cooperation Council.
The UK's two sovereign sukuk issuances have been successful in providing a platform for and helping to maintain the UK’s position as the leading western hub for Islamic finance while also supporting the UK’s Islamic banks. Given the development of the sector in the last decade and the relatively high cost of issuing sukuk, the Government is not at this time planning to issue another Sukuk after the current Sukuk matures in summer 2026.
Officials continue to engage with industry and international partners to explore opportunities for synergies between Islamic finance and the sustainability agenda.
Islamic financial instruments are covered under the same legislative and regulatory framework as their conventional equivalents, and the Government works to address any unintended differences that may arise.
Asked by: Baroness Thomas of Winchester (Liberal Democrat - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what steps they are taking to keep the Muslim community informed on the progress of talks towards a Sharia-compliant agreement on alternative student finance, other than through the Gov.uk website.
Answered by Baroness Smith of Malvern - Minister of State (Department for Work and Pensions)
The department has convened an expert working group, made up of representatives from the Muslim community and Islamic finance sector, to keep the Muslim community informed on progress towards introducing an alternative student finance product, compatible with Islamic finance principles.
As part of the department’s engagement with the working group, we are seeking their expert advice and drawing on their feedback to develop our community and stakeholder engagement plans.
It is important that the Muslim community is kept informed on the certification of the alternative student finance product as compatible with Islamic finance principles. We have appointed Islamic finance advisers, the Islamic Finance Council UK, to oversee this work and will provide further updates as the work progresses.
Asked by: Tanmanjeet Singh Dhesi (Labour - Slough)
Question to the Department for Education:
To ask the Secretary of State for Education, what her planned timetable is for implementing alternative student finance following the introduction of the Lifelong Learning Entitlement in the 2025-26 academic year.
Answered by Janet Daby
The department is committed to introducing an alternative student finance (ASF) product, compatible with Islamic finance principles, as quickly as we can. To support this, the department has reconvened an expert working group made up of representatives from the Islamic community and the finance sector. The department has also appointed a secretariat to take forward the certification of the product as compatible with Islamic finance principles.
The delivery of the ASF product will need to follow the introduction of the Lifelong Learning Entitlement (LLE), which will replace the existing student finance system when introduced. The first LLE-funded courses and modules will begin in January 2027 and the department intends to introduce ASF as soon as possible after this.
Asked by: Kim Johnson (Labour - Liverpool Riverside)
Question to the Department for Education:
To ask the Secretary of State for Education, whether she plans to introduce an alternative student finance product for Muslim students.
Answered by Janet Daby
The department is committed to introducing an Alternative Student Finance (ASF) product, compatible with Islamic finance principles, as quickly as it can. To support this, in November we are reconvening the ASF working group, made up of representatives from the Islamic community and finance sector. We have also appointed a secretariat to take forward the Sharia-certification of the ASF product. The department is currently considering how it can best drive forward further progress on ASF and will provide an update on plans in due course.
Asked by: Afzal Khan (Labour - Manchester Rusholme)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of bringing the tax regulations for Sharia-compliant mortgages in line with conventional mortgages.
Answered by James Murray - Chief Secretary to the Treasury
The Government is committed to the continued strength of the UK Islamic Finance sector, both as an important part of the UK’s overall financial ecosystem and as an instrument of financial inclusion.
The alternative finance tax rules aim to provide a level playing field for tax purposes across alternative and conventional financing arrangements.
On 16 January 2024, HM Treasury published a consultation proposing changes to the Capital Gains Tax (CGT) rules that apply to alternative finance arrangements. The proposed changes seek to amend those rules so that where property is used as collateral for the purposes of raising finance, the CGT outcome is the same whether alternative finance or conventional finance is used. The consultation also asked whether there are any implications for capital allowances. The consultation closed on 9 April 2024 and the Government is considering responses. Next steps will be set out in due course.
Asked by: Afzal Khan (Labour - Manchester Rusholme)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to respond to the consultation entitled Tax Simplification for Alternative Finance, which closed 9 April 2024.
Answered by James Murray - Chief Secretary to the Treasury
The Government is committed to the continued strength of the UK Islamic Finance sector, both as an important part of the UK’s overall financial ecosystem and as an instrument of financial inclusion.
The alternative finance tax rules aim to provide a level playing field for tax purposes across alternative and conventional financing arrangements.
On 16 January 2024, HM Treasury published a consultation proposing changes to the Capital Gains Tax (CGT) rules that apply to alternative finance arrangements. The proposed changes seek to amend those rules so that where property is used as collateral for the purposes of raising finance, the CGT outcome is the same whether alternative finance or conventional finance is used. The consultation also asked whether there are any implications for capital allowances. The consultation closed on 9 April 2024 and the Government is considering responses. Next steps will be set out in due course.