The Competition Commission has today published its final remittal report recommending a competition test in the planning system.
Commenting on the report Lucy Neville-Rolfe, Executive Director (Corporate and Legal Affairs) said:
“We still believe the Competition Commission has made the wrong recommendation in this small but important aspect of its extensive inquiry.
“The Government should think very carefully before proceeding with this recommendation and intervening aggressively in what is acknowledged to be a highly competitive industry and deterring investment in these difficult economic times.
“The competition test would block investment in both new stores and extensions and create delay and unpredictability in the planning system, depriving customers of the benefits of new and updated stores. It would act as a brake on growth in an industry that is an important source of jobs up and down the country. This would undermine much-needed regeneration and makes absolutely no sense in today’s challenging economic climate.
“Despite being instructed by the Competition Appeal Tribunal to reconsider the cost and benefits of the proposal, the Commission continues to rely on a theoretical model and unrealistic assumptions rather than looking at real towns and stores. Once you strip away the assumptions the Commission is unable to provide evidence of any real benefits.
“As for the costs of the proposal, the Commission’s own work shows these will outweigh its benefits for at least six years, and we have shown a significant proportion of those benefits would not even arise for 25 years – a very long time in any industry, let alone retail.
“At the heart of the debate and our successful appeal is what happens if a development is blocked by the test. A number of retailers have told the Commission about the risks of assuming 100% replacement entry, but this is exactly what it has done.”
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