Speech by Economic Secretary Ivan Lewis at the Shari'a stakeholder launch

It’s my pleasure to be here this afternoon in Kensington at the Muslim Cultural Heritage Centre – so let me take this opportunity to thank both the Muslim Council of Britain and the Children’s Mutual for inviting me here today.

Your support has been truly invaluable in getting us to this vital milestone for the Child Trust Fund.

I’m also delighted to see so many Muslim families here today, actively involved in the launch.

The Muslim Council of Britain have worked tirelessly with us and providers to make the Child Trust Fund accessible to everyone in the Muslim community.

And it’s particularly good that Children’s Mutual – already a major player in the Child Trust Fund market – has been able to rise to this challenge and deliver a vital next step.
Let me be clear – myself, the Treasury and my colleagues across government wholly support and welcome this first Stakeholder Child Trust Fund. Not just because it continues provision for so many of our kids – but because it is specifically designed to be a Shari’a compliant savings and investment product.

Today witnesses a new and important product, added to the more than impressive selection already on offer to the parents of young children.

In total, we now have over one hundred providers and distributors, offering a wide range of investment options.

From straight-forward savings accounts, through to shares-based investments.

From ethical investments, right through to this new tailor-made account that meets the specific needs of the Muslim community in Britain.

You know, stakeholder accounts are proving really popular – and it’s pretty encouraging to see the principle of low cost and risk-controlled products winning through.

But the reason is simple. The Stakeholder Child Trust Fund's risk controls, low minimum contribution levels and low overall charges mean that it offers unprecedented access to a potentially higher growth of shares. And it provides great value for the overwhelming majority of families.

So this first Shari’a compliant Stakeholder Child Trust Fund is a massive achievement, applying these principles in greater depth – including Muslims ever more within our evolving financial system.

As the Shari’a market itself expands, we are keen to support growth across all products. We have already seen pioneering examples available in the mortgage and current account market.

And just last week Parliament debated new legislation to increase fairness for Shari’a compliant home finance products.

The March Budget also announced tax rules so that the mark-up on a Murabaha transaction and the profit-share on a Mudaraba arrangement are taxed on a level playing field with equivalent banking products.

But we want go further. That is why we are consulting with providers of Shari’a compliant financial products – helping to identify further areas of Islamic finance where tax complications may arise.

And it is why we will encourage further innovation in product development where possible in the years to come.

Today is an important day for Britain, as we lead the way in designing and providing Islamic Finance products.

Today is a success for the Stakeholder principles of low-cost, simple and risk-controlled saving and investment products.

And today is a credit for the Child Trust Fund – a product that has only been made possible through the persistently hard work of people dedicated to making it a success. To ensuring it is truly universal and accessible to all.

So, please join with me in welcoming this excellent, new, Shari’a focused product to the Child Trust Fund market.

Thank you.