UK still committed to sukuk programme

The UK is still committed to a programme of Islamic bond issuance, a senior government figure announced on Monday.

Economic secretary and city minister Kitty Ussher told the third meeting of the Islamic Finance Experts Group that the remaining barriers to a UK sovereign sukuk issue were surmountable and that a rolling programme of GBP2 billion (US$4 bn) in issuance would be achievable over time.

Ussher said: "The Government is determined to maintain its momentum on work on Islamic finance and to make clear to stakeholders its commitment to this industry.

"As such, we want to reiterate our aim to publish a paper detailing the UK strategy on Islamic finance by the end of 2008."

Following a consultation, which began in November 2007, the government has decided that bill-like sukuk are preferable to bond-like sukuk.

The sukuk programme would be fully integrated with the conventional Treasury bill programme, which has rolling issuance at one, three and six month maturities.

The UK government plans to use a ‘plan vanilla' ijara-based structure in its sukuk issuance.

An update of the scheme's progress will be issued in the government's 2008 pre-budget report.

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