Asked by: Alan Brown (Scottish National Party - Kilmarnock and Loudoun)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment the Government has made of the potential merits of using sukuk to finance infrastructure projects; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The proceeds from the Sukuk, like the proceeds from the wider gilt programme, flow into the consolidated fund. This is used for general expenditure, including expenditure on infrastructure. The government considers the core gilt program rather than the Sukuk to be the most cost-effective way of raising money for expenditure, including that of infrastructure projects. The main purpose behind the decision to issue a second Sukuk is to reaffirm the government’s commitment to the UK being the Western hub for Islamic finance, whilst also providing high-quality liquid assets to UK-based Islamic banks.Asked by: Stephen Timms (Labour - East Ham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment the Government has made of the potential merits of using Islamic financial certificates, sukuk to finance infrastructure projects without adding to Government debt on the public sector balance sheet; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The proceeds from the Sukuk, like the proceeds from the wider gilt programme, flow into the consolidated fund. This is used for general expenditure, including expenditure on infrastructure. The government considers the core gilt program rather than the Sukuk to be the most cost-effective way of raising money for expenditure, including that of infrastructure projects. The main purpose behind the decision to issue a second Sukuk is to reaffirm the government’s commitment to the UK being the Western hub for Islamic finance, whilst also providing high-quality liquid assets to UK-based Islamic banks.Asked by: Matthew Pennycook (Labour - Greenwich and Woolwich)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how many high street banks offer Islamic mortgage services.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to the availability of Islamic finance in the UK to ensure that no one is denied access to competitive financial products for reasons of faith.
Sharia-compliant home purchase plans are enabled by regulations overseen by the Financial Conduct Authority (FCA). They are currently offered by four UK banks.
Beyond the requirements set out in the FCA regulations, decisions around the pricing and availability of individual mortgage loans remain commercial decisions for lenders, and the Government does not seek to intervene in these decisions.
Asked by: Matthew Pennycook (Labour - Greenwich and Woolwich)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent assessment he has made of the availability of Sharia-compliant home purchase plans.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to the availability of Islamic finance in the UK to ensure that no one is denied access to competitive financial products for reasons of faith. We are doing this by working to ensure that Sharia-compliant financial products can be supplied on the same terms and at the same standard as conventional financial products. The UK is already the western leader in Islamic finance, however we continue to explore areas where Islamic finance can be developed further.
Home purchase plans are enabled by regulations overseen by the Financial Conduct Authority (FCA), the independent regulator set up by the Government to ensure consumers are receive appropriate protection.
Beyond the requirements set out in the FCA regulations, decisions around the pricing and availability of individual mortgage loans remain commercial decisions for lenders, and the Government does not seek to intervene in these decisions.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the Department for International Development:
To ask the Secretary of State for International Development, what funding her Department provides to support programmes to improve the economy of Egypt.
Answered by Alistair Burt
The UK is helping to address Egypt’s economic and demographic challenges as part of our support for the transition to long-term stability in North Africa. The DFID/FCO North Africa Joint Unit is responsible for assistance provided through the Conflict, Security and Stability Fund. This includes a £15 million partnership with the World Bank from 2016-2020 to create jobs and promote social inclusion; and a £2 million partnership with the International Finance Corporation over 2017-2020 to help support Egyptian start-ups and entrepreneurs. We are providing technical assistance to the Ministry of Finance and other parts of the Egyptian Government to help implement economic reforms. We are also planning to fund research into economic reform policy in Egypt.
In 2017 DFID provided a $150 million guarantee to the World Bank for a $1.15bn Development Policy Loan to Egypt, focused on supporting economic reform and promoting jobs and inclusive growth in Egypt. DFID also funds the Arab Women’s Enterprise Fund (AWEF) in partnership with the Islamic Development Bank (each providing £10 million for the region). Over five years (2015-2020), AWEF’s goal is to improve the income and well-being of 150,000 women across Egypt and Jordan by addressing systematic barriers facing different sectors of the economy. The fund has a target of 120,000 direct and indirect women beneficiaries in Egypt.
Asked by: Lyn Brown (Labour - West Ham)
Question to the Department for Education:
To ask the Secretary of State for Education, whether a sharia-compliant alternative student finance system will be available for people beginning university courses in September 2018.
Answered by Sam Gyimah
We understand the concern that some prospective students may be deterred from pursuing higher education because they are unable to use loans that bear interest.
We are therefore continuing to work on an alternative student finance product that would avoid using interest. We have appointed specialist advisors from the Islamic Finance Council to help design a new system that can make maintenance and tuition fee payments and collect repayment contributions in a way that is both equivalent to the current system and compliant with the requirements of Islamic finance.
This a complex area requiring careful consideration of a range of technical issues, including the nature of the accounting for the new arrangements, the degree of legal separation required for any fund, the treatment of cashflows, the nature of the commitments that a student will make under the new system, and the method for establishing equivalence of outcome, amongst others.
This work is being undertaken at pace and we will be in a good place to provide an update in the summer. I will set out our planned timetable at that time. I note that it typically takes two years to introduce a new student finance product, which would rule out launching for academic year 2018/19.
Asked by: Lyn Brown (Labour - West Ham)
Question to the Department for Education:
To ask the Secretary of State for Education, what progress has been made on providing a sharia-compliant alternative student finance system.
Answered by Sam Gyimah
We understand the concern that some prospective students may be deterred from pursuing higher education because they are unable to use loans that bear interest.
We are therefore continuing to work on an alternative student finance product that would avoid using interest. We have appointed specialist advisors from the Islamic Finance Council to help design a new system that can make maintenance and tuition fee payments and collect repayment contributions in a way that is both equivalent to the current system and compliant with the requirements of Islamic finance.
This a complex area requiring careful consideration of a range of technical issues, including the nature of the accounting for the new arrangements, the degree of legal separation required for any fund, the treatment of cashflows, the nature of the commitments that a student will make under the new system, and the method for establishing equivalence of outcome, amongst others.
This work is being undertaken at pace and we will be in a good place to provide an update in the summer. I will set out our planned timetable at that time. I note that it typically takes two years to introduce a new student finance product, which would rule out launching for academic year 2018/19.
Asked by: Peter Kyle (Labour - Hove)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 23 February 2018 to Question 128612, whether the proposed Sharia-compliant alternative student finance product will be available for students applying for university in the 2018-19 academic year.
Answered by Sam Gyimah
As previously stated, we are currently working with Islamic Finance experts to design an alternative product that meets Islamic financial principles while delivering an equivalent outcome to the main student loan system. This work is complex and we will provide an update and a timetable in the summer.
It can typically take two years to introduce a new student finance product, which would rule out launching for Academic Year 2018/19.
Asked by: Peter Kyle (Labour - Hove)
Question to the Department for Education:
To ask the Secretary of State for Education, pursuant to the Answer of 12 September 2017 to Question 7482, when his Department plans to announce plans to bring forward legislative proposals for the establishment of a Sharia-compliant alternative student finance product.
Answered by Sam Gyimah
We understand the concern that some prospective students may be deterred from pursuing higher education because they are unable to use loans that bear interest.
We are therefore continuing to work on an alternative student finance product that would avoid using interest. We have appointed specialist advisors from the Islamic Finance Council to help design a new system that can make maintenance and tuition fee payments and collect repayment contributions in a way that is both equivalent to the current system and compliant with the requirements of Islamic finance.
This a complex area requiring careful consideration of a range of technical issues, including the nature of the accounting for the new arrangements, the degree of legal separation required for any fund, the treatment of cash flows, the nature of the commitments that a student will make under the new system, and the method for establishing equivalence of outcome, amongst others.
We are making progress and expect to be able to provide an update in the summer, when we have clarity on what we need to do to introduce the alternative product.
Asked by: Steve McCabe (Labour - Birmingham, Selly Oak)
Question to the Department for Education:
To ask the Secretary of State for Education, what progress her Department has made on the establishment of a Sharia-compliant alternative finance product based on the Takaful model.
Answered by Lord Johnson of Marylebone
We are now working to deliver an alternative student finance system following the passage of Higher Education and Research Act 2017.
We will be engaging with experts in Islamic Finance on the detail of the regulations, processes, IT and accounting systems that will be needed to create the new set of alternative student finance products. This detailed work will be complex but we remain keen to introduce the new alternative system as soon as we feasibly can.
We will announce more detailed plans in due course.