New opening for old Lancashire mill town creates competition (2,3)
I believe the answer is:
fa cup
'competition' is the definition.
(the FA Cup is a football competition)
'new opening for old lancashire mill town' is the wordplay.
I cannot really understand how this works, but
'opening' could be 'cup' (cup is a kind of opening) and 'cup' is located in the answer.
The remaining letters 'fa' is a valid word which might be clued in a way I don't understand.
This may be the basis of the clue (or it may be nonsense).
'creates' acts as a link.
(Other definitions for fa cup that I've seen before include "football tournament" , "competition" , "Football trophy" .)