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Scotland Act 1998

Paragraph 4: Financial Assistance to Industry

Paragraph 4 clarifies the extent to which the Scottish Parliament can legislate about financial assistance to industry.

Paragraph 4(1) provides that the giving of financial assistance to commercial activities is not reserved where it is for the purpose of promoting or sustaining economic development or employment.  This would include provision of a general nature which permits assistance to industries whose regulation is a reserved matter.

However, provision is made by paragraph 4(2) for certain exceptions.  These are as follows:


the giving of financial assistance to any activities in pursuance of a power exercisable only in relation to activities which are reserved.  This means that the Parliament cannot legislate for such assistance specifically in relation to a reserved commercial activity such as coal mining;


the giving of financial assistance in relation to matters covered in Part I of Schedule 5 (such as the Constitution, the Crown, foreign affairs, etc.), except for the matters in paragraph 9 (defence).  The Parliament could therefore give financial assistance of a general nature to the defence industry in Scotland; and


the giving of financial assistance to the “reserved bodies” to which paragraph 3 of Part III of Schedule 5 applies (see list above).

Paragraph 4(2)(c) clarifies that paragraph 4(1) does not prejudice the non-reservation of specific types of financial assistance to industry in Sections C11(1), E2 and E3 of Part II of Schedule 5, such as financial assistance for certain types of rail and shipping services or the provision of certain services at public post offices.

Paragraph 4(3) clarifies that paragraph 4(1) does not affect the question whether any matter other than financial assistance to which it applies is reserved..

The provisions in Schedule 5 relating to financial assistance should be read in conjunction with section 56.  This provides for a number of “devolved” functions relating to the giving of specific types of financial assistance to be shared powers.  This means that a UK Minister can also exercise those listed functions in or as regards Scotland.


This was added by Article 2(2) of SI 2000/3252.

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