The Secretary of State shall, in accordance with a scheme made by him, make payments to persons who surrender or otherwise dispose of firearms—
(a)which they had, and were entitled to have, in their possession immediately before 23rd September 1987 by virtue of firearm or shot gun certificates held by them; or
(b)which before that date they had contracted to acquire and were entitled to have in their possession on or after that date by virtue of such certificates held by them,
and the possession of which will become, or has become, unlawful by virtue of section 1(2) or 7(1) above.