This government has decentralisation in its DNA. In less than a year in office, we have seen a radically different approach to the public sector and localism, with the coalition devolving more power (but less money) to local authorities. But despite strong rhetoric, we have little idea what the coalition economy will look like.

For New Labour, the rule was Big is Beautiful. While our Continental counterparts grew thriving Mittelstands and high streets with locally owned grocers, planning and competition laws in the UK slowly pushed independents out.

In the grocery market, this has meant 5% of independent retailers disappearing every year, with 97% of groceries today sold by multiples. Today, it would be impossible for an independent retailer just starting out to be a market leader, as Tesco and Sainsbury’s did in the past. This situation led to two Competition Commission enquiries in the past decade. These were opportunities to set a standard for competitive markets. But their recommendations offered little to reverse the ongoing concentration of the market.

When the Prime Minister declared that the UK was “open for business,” was he addressing the Big Four, or will this be an economy that is open to everyone? If it is the latter, the coalition must question whether our current competition regime is up to the job.

In our recent report The Right to Retail, we looked at how initiatives such as the potentially radical neighbourhood plans set out in the Localism Bill could help create an economy that can sustain both big and small. Neighbourhoods should have the power to designate the local retail mix, deciding what they need.

This could mean pre-approving plans for a new Tesco or a new bakery. It could mean giving communities the tools to revive and run a vacant shop or to designate existing shops as local assets, qualifying them for business rate relief.

If the coalition is serious about localism, it won’t stop with public services. It will give communities the power to create a more decentralised economy where everyone has the opportunity to compete.

Adam Schoenborn is the author of The Right to Retail, a report published this month by the thinktank ResPublica.