The Mail on Sunday is not my first port of call for financial news and analysis – to be honest it is not my first port of call for serious news about anything. Rather it is a useful medium to gauge the mood of a certain section of British Society. The Financial Times has nothing about this at all today although in October David Oakley wrote about the problems attached to Ed Balls’ proposal and how unlikely it was to come to fruition in 2008, if at all. Others will be interested and will assume that it is happening now rather than a proposal which may not come to fruition, and those others will claim it is another step towards British dhimmitude, another nail in the coffin of old England which is dead. I post the Mail on Sunday lead article and editorial as it stands, but with the above as my opinion.
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."
Other Western nations have been reluctant to issue Islamic bonds.
In the United States the bonds are banned partly as a result of claims that the money could be linked to terrorism.
However, The Mail on Sunday has established that Chancellor Alistair Darling is ready to give the go-ahead to sharia-compliant bonds – known as "sukuk", an early Arabic form of cheque.
The deadline for responses to Mr Darling's consultation document setting out how the bonds will work expires on Thursday. (I emphasis – this is a CONSULTATION document and the proposal is not popular)
The Islamic bonds proposal was devised by Mr Brown's former Treasury adviser Ed Balls, now Schools Secretary and the Premier's most powerful Cabinet ally.
He claims it is a vital way of improving relations with Muslims in Britain as well as helping the UK to obtain vast sums from Middle-East banks in oil-rich nations such as Dubai and Qatar.
Sharia-compliant bonds have been issued by the governments of Pakistan and Malaysia and private banks but never by a Western government. The Government has already backed Islamic car loans and mortgages.
The Treasury consultation document says Government assets such as "buildings or a piece of infrastructure" would be switched to a "special-purpose vehicle" set up to administer the bond. This would be carried out by a contract known as an "ijara".
The asset would then be leased back by the Government, generating rental payments for the Islamic bond holders. When the "sukuk" matured, the Government would guarantee to buy back the asset, allowing the bond-holders to get their redemption payments.
"Sukuk are akin to Islamic investment certificates," the document says.
"They are designed to be in compliance with sharia law, the divine law in Islam which is based on the Quran." Mary has written several times about what a con trick sukuk is.
It is strangely shocking to find that Her Majesty's Treasury, that very matter-of-fact department, should be issuing bonds that comply with the ancient rules of sharia law.
As it happens, the decision makes sense on business terms. Many major investors are Muslim and it would be foolish to spurn their custom by refusing to consider their religious views.
Yet there is still something slightly unsettling about the news. Is it coincidental that ours is the first major Western country to offer this facility?
Official Britain has a startling enthusiasm for adjusting itself to make Muslims comfortable. The Home Secretary has weirdly described terrorist activity as 'Anti-Islamic'.
The Foreign Office was recently revealed by a whistleblower to be giving undue status to militant strands of Islam. It (unsuccessfully) prosecuted the whistleblower.
Some of this behaviour has roots in the century-old Arabism of the diplomatic service. Some of it is entirely cynical, influenced by the fact that much of Britain's oil comes from Muslim regions, or that so many Labour MPs' majorities depend on Muslim votes.
But it coincides with an increasing tendency to reduce the privileges of the Christian religion in Britain.
Yet multicultural liberals, many of whom profess themselves Godless and despise Christianity, are strangely ready to suck up to Islam, whose views on such topics are far fiercer than those of the most militant Christian moralist.
It sometimes seems as if we are slowly drifting, without really thinking about it, or meaning to, towards the Islamic world. It is time we did think about it.
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