The really important decision

THE most significant event this week will not be whether Philip Green actually tables an offer for Marks & Spencer, even if that will dominate the columns of this and other newspapers, because at the end of the day it does not matter much who owns the stores group.

The customers certainly don't care. If whoever runs the chain gets it right they are happy, but if the management gets it wrong they simply take their business to a store that gives them more of what they want. So all that matters is how much Green is willing to pay, whether or not it is in cash and whether or not the competition authorities will allow him a clear run.

The management choice is between a brilliant businessman with a terrible public image and a less talented businessman with a brilliant public image. The M&S defence is trying to obscure the essential simplicity of the debate by keeping attention focused on Green's eccentricity and mythical conflicts of interest around the role of HBOS chairman Lord Stevenson.

But all this is superficial froth that will count for nothing when shareholders have to decide whether to hold or sell. Green's record shows he is the better retailer - but will he pay enough to be given the chance?

It may barely figure in the headlines because it lacks 'human interest', but there should be news this week on a matter of far more fundamental importance to the vast bulk of the population. This is the Treasury's decision on the level of charges it will allow for the new style of savings products proposed in an inquiry led by Ron Sandler a couple of years ago and which the Government hopes will encourage more people to provide for their later years.

The Treasury is seeking nothing less than a seismic shift in people's attitude to saving. Being coy, it has not yet said when the announcement on charges will be made but with the elections out of the way, there are strong hints it will be this week. This is clearly an important decision but there is a real danger it will be fluffed because it takes us to the heart of conflicting views as to why people in this country don't save.

The Treasury and Sandler say it is because products are not simple enough, they cost too much and people do not trust the savings industry to deliver on its promises. But, as was made clear in work by lawyers Beachcroft Wansboroughs for the Association of British Insurers, it is equally arguable that the problem is a failure of demand rather than a failure of supply.

Most people don't have any money, or feel they don't, and do not want to make the sacrifice saving entails so they put it off. If all it were to take to change this attitude was the launch of a few cheap, simple products, some company would have cleaned up already by producing them, says Beachcroft Wansboroughs.

If there is a weakness in the Government's approach, the analysis adds, it is that measures always target those supplying the products - by regulating the sales process, insisting on disclosure of commissions and now capping charges. It never addresses those who are supposed to buy - for example, by providing education and tax incentives to those willing to set money aside. This, according to the industry, is why most initiatives fail.

This time the debate has focused on a proposed price cap of 1% on these new products. The awaited announcement will either confirm this level - which the industry says is hopelessly unrealistic - or more probably unveil an increase.

It may not get us very far, however, because charges are only one part of the mix. The viability of a savings product depends crucially also on the type of regulation it attracts, and therefore the cost of sales, the amount people are willing to put in, whether it can be sold in bulk via the workplace and what the lapse rate is. It is quite probable, therefore, that the Government will increase the cap, thinking it has dealt with the savings industry's objections, only to find that the other barriers continue to make any of these products targeted at low-to-middling earners hopelessly uneconomic.

This is an issue that cannot be fudged, although the Government may be tempted to try. The industry cannot create products on which it loses money because it will end up going bust. It is the customers' nightmare, too, that they give their money to an organisation that is not around 20 years on when it is time to collect.

So if the regime means the products cannot be run profitably - or they are too risky because it takes too long for them to break even - they will not be launched, they will not be marketed and they will not meet the Government's objective. That is why the decision, when it comes, is rather more important than who owns M&S.