Based on returns we have seen so far; allowing (collectively) the EU to do your work (badly) for you, for the Tory party spending the last ten years squabbling among yourselves instead of building a coherent abiding policy to present to and inspire voters, and consequently allowing the EU dominated British government to ruin the British economy, based on those things, £63,000 is about £40,000 too much.

JR: "The whole point of my blog advice is to rescue the economy dfrom a disastrous crash."

Good luck, the crash is upon us. We should now be planning not how to put it off, but how to build a better stronger economy afterward. You seem to want a debt based economy – essentially to carry on as before. But this is an opportunity to encourage … prudence. Not in the dishonest fraudulent way Gordon Brown used to use the term, but a real savings based wealth generating economy.

The Tory party ought to be encouraging people like Peter, If a Tory front bench politician came out and said, 'Yes, put your savings in the bank, you will get interest on it tax free, we the Tory government will control inflation and government spending, and that will allow us to abolish inheritance tax and bring down Government debt over the longer term. We will role back the interference of the state in your affairs, cut back on meddling inspectors, reinforce the principle of private property. We will build a business friendly tax regime to encourage employment. The BBC will be made an independent self financing organization free from Government interference both foreign and domestic."

The last bit about the BBC was tagged on because a) it needs to be done, but b) because without reigning in the BBC, none of the other things can be accomplished.

For gods sake, someone in the Tory party stand up and set the agenda. Otherwise, what collectively are you for?

Cutting interest rates will have little or no impact on the economy.

Yes, if cuts are passed on to those on variable rates, or to new borrowers who are keen to risk taking a mortgage in volatile times with jobs evaporating rapidly, then it may help to reduce payments for some, but it won't help the millions of borrowers on fixed rates nor will it help the remortgage market or those planning to retire on equity release schemes.

In addition to falling property values, lenders have reduced their loans to value ratio's and increased income ratio's for borrowers. Also, many non-conforming lenders have already sold up, moved on and are left the scene or are unable to sell their mortgage portfolio's and will consequently be unable to lend because they have no proper balance sheet.

Northern Rock's previous business model has now been taken out of the equation, and the washes of money it was once producing has been removed from our economy. In 2007 for instance, NR's remortgage business accounted for 20% of all remortgages with non-conforming lenders accounting for a further 20% and this lending is an irreplaceable drop of 40% not counting HBOS which accounted for most other lending which is now itself unable to lend or survive for the very same reasons.

The markets are not buying their portfolio's and this happened well before Lehman Bros dropped off the edge of its own financial earth.

A reduction in interest rates amounts to tinkering and blind panic.
It also underscores a fundamental lack of understanding by the government and Bank of England of how much the remortgage market once fueled our economy and attempts to revive it is akin to trying to re-create the already burst bubble.

Item:
How will a firm which needs to give a bank an asset guarantee manage to borrow against a home which has devalued when its current obligation exceeds the banks new risk ratios?

Item:
How will a home owner remortgage their devalued home when their lender has lowered the loan to value ratio in a falling market?

Item:
Where is the missing money in our economy going to come from when the remortgage market has dried up and is under the bureaucratic thumb of the FSA with its stringently enforced rules and regulations which themselves undermine the market?

Jobs can be saved by relaxing and remodelling mortgage regulation to remove red tape along with costs to business.

Additionally, lending ratio's and access to unsecured loans should be made available to businesses either through the banking institutions or through the DTI.

However this would simply perpetuate the reality that we are as an economy, spending money which has previously appeared from thin air which once propelled business and an economy which is without a real manufacturing base within a global economy which has itself dried up and hopefully awoken to the reality that the money driving it forward never really existed in the first place except mostly for the remortgage market and your flexible friend.

There's no turning back to this and it would make no sense to try for the world has finally caught on to the reality that nothing can be created from thin air and borrowing money on illiquid or devaluing assets is just not good practice and likely very potty.

Politicians today have no interest in prudence. They are having a fling with debt, they are reckless spendthrifts – it always helps that they spend someone else's money too.

You might expect the Tory party to advance thrift and advocate a sound savings based economy. Since the Tory party under Cameron doesn't 'do' principles, advancing and defending such a policy is too much like hard work – god forbid they might actually do something worthwhile for the £120,000 + expenses p.a. that we pay them.

Financially independent folk are too much trouble so much less amenable to being bossed around and far more independently minded for todays stupid politicians.

Peter: "Now the return on my retirement savings.."

Expect no assistance from the Tory party nor sympathy from Mr Redwood. He and all his chums in Parliament have a very comfortable tax funded indexed linked pension, he nor his retired political chums will not be feeling the pinch during their retirement!

You have been recklessly sober in you financial arrangements. Should have run up huge debts, taken on multiple mortgages and massive credit card debts. Then the Tory party would come riding to your rescue with someone else's money – probably your son's, daughters or grandchildrens future earnings.

Reply: An MP's salary is £63,000, not £120,000. The whoel point of my blog advice is to rescue the economy dfrom a disastrous crash. Savers will not benefit from the crash. I am all in favour of prudence. The last year has seen billions wiped off savers' assets thanks to the poor management of the economy.There is a betetr way.

How else will the government pay for the investment in bailing out banks but by printing the necessary money? How better to erode the burdens of debts, of its own, of the nation's companies, and of its voters, by letting inflation rip for a while? What will happen to the price of imported goods if the pound sags because it no longer offers attractive interest rates?

I consider the bank has been doing me a great service by robustly defending me from these ills, which I fear much more than any recession.