The Competition Appeal Tribunal's decision to block plans to introduce a "competition test" to curb supermarkets' dominance of the grocery sector will ensure the impartiality of the planning system is not undermined.

Following an investigation into the operation of the grocery market the Competition Commission proposed the introduction of the "competition test" to boost grocery competition by ensuring no one retailer dominated an area.

Under the proposal large scale retail development applications would be assessed by the Office of Fair Trading (OFT) and potentially turned down if the OFT thought approval would deliver too much market power into the hands of a single retail chain.

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The Royal Town Planning Institute opposed the Competition Commission's decision on the grounds that to ensure fair and impartial decision making, the planning system should consider only what is being proposed, rather than who is proposing it. It is satisfied that that the proposed retail impact assessment, which would remain after the competition test is removed, would make good planning sense.

RTPI Policy Director Rynd Smith said the decision makes clear that the Competition Commission had not fully considered the effect of its proposed test.

"It validates RTPI concerns about the test expressed in April 2008. However, the decision is likely to cause further delay in the finalisation of the proposed test. With the credit crunch already creating caution among developers, the government must clarify its retail planning policy in draft PPS6 as a matter of urgency.

"Waiting for a final version of the competition test is likely to do more economic harm than good. Further delay will only add further uncertainty at a time when developers need clear signals from decision makers."

(GK/JM)