This piece was first published in the ‘190 years of The Spectator’ special.
15 March 1986
It is difficult to estimate the number of young investment bankers, stockbrokers and commodity brokers earning £100,000 a year. Perhaps there are only a couple of thousand, but they are so mobile and noisy that they give the impression of being far more numerous. Most are aged between 26 and 34, and two years ago they were being paid £25,000, in some cases even less, until the opening up of the City markets precipitated an epidemic of headhunting and concomitant salaries. In this respect they resemble the lucky winners on Leslie Crowther’s television quiz The Price is Right, in which a random selection of wallies get the chance to win microwave ovens and Clairol foot spas.
The young market makers were similarly in the right seats at the right time, with the right firms at the right level, but with no particular expectations of being singled out for big prizes. ‘Investment bankers on the Japanese side,’ Leslie Crowther might huzza. ‘Come on down.’ Money is the new club. In the early years of this decade it was narcotics that provided the focus and conversation for the aimless young rich.
Now their more responsible and industrious cousins (some of whom felt rather left out during the drugs era, working away in their dull City offices) have a club of their own. Membership qualifications: a large salary, minimum £75,000. Club benefits: lively complacent conversation about tax avoidance, accountancy fees and how to spend what’s left.
The only good news, for those of us outside the winner’s enclosure, is that the huge salaries will not last. They are largely contingent on performance and it seems unlikely that sufficient new business will be generated to justify the millions of pounds in overheads to set up quite modest operations. ‘They’re going to have to sweat to ratify their positions,’ said an analyst in last week’s Financial Weekly, cheerfully jumbling his metaphors. ‘Unless the profits roll in, the screws will really be on.’ Some commentators give the boom three years; others five to seven. After that we can look forward to a levelling (unless the Government does it first; there is wild pre-Budget talk of supertax for people earning more than £100,000).
How the young market makers will adjust to reduced circumstances is hard to predict. Probably, by then, their wine bar ventures will be producing enough revenue to cushion the fall.