Muslims keen to comply with the financial strictures of religious Islamic law may be able to buy Premium Bonds for the first time after a government review announced yesterday.
Ed Balls, the Treasury Minister in charge of City affairs, wants all types of government-sponsored savings products to be accessible to those who adhere to Sharia.
The appropriately-named Balls is not just a treasury minister. He is also a key ally of Gordon Brown, and could perhaps be the next Chancellor of the Exchequer.
Premium Bonds, a favourite among small savers for 50 years, will be among the National Savings products to be tested for suitability. All other National Savings accounts will also be examined.
Government bonds — so-called gilts — sold to individuals and big institutional investors will also come under the feasibility study. They may be where the biggest impact of any review is felt.
The Government will issue about £60 billion of gilts this year. The Treasury estimates that Islamic assets top £125 billion worldwide.
Financial products offered by the Government to ordinary Muslim investors present a challenge for National Savings, which provides safe and simple products ranging from Premium Bonds to savings accounts.
Premium Bonds will have to overcome two key difficulties: Sharia outlaws the payment of interest; and gambling runs contrary to strict Islamic tradition.
Nation states most commonly borrow through the issue of bonds. Several Muslim countries, such as Malaysia, Singapore (not actually a Muslim country, but a secular nation with Buddhists as the largest group, followed by Christians, and only then Muslims - FR) and the financial centres of Qatar and Dubai, issue a proportion of their national debt in Islamic bonds.
Most Islamic financial products work on the principle of investing in a fixed asset able to generate a rate of return, such as property that yields rent or an asset that can repay a larger capital sum on redemption. These avoid paying interest.
Pakistan has issued an Islamic bond linked to its motorway network, which generates income through road tolls.
The Treasury was unable to say how British bonds might be structured but, if it does find a way, Britain would be the first European state to issue financial products that are compliant with Islamic law.
Oh, great. Let's be the most Islamified nation in Europe.
As with so many instances of Islamification in this country, this is, of itself, rather innocuous. But it's the cumulative effect of so many surrenders that must be taken into account. This kind of surrender is in the same class as the increasing habit of serving all schoolchildren Halal meat, or pointing all graves towards Mecca. It doesn't necessarily mean Muslims are running the country, but it does mean that the Muslim position on these matters is becoming the default position, often without any debate at all. And that is the most insidious, and most dangerous, aspect of Islamification.