Negative thinking: the return of the Saatchis

The creators of Mrs Thatcher's legendarily cutting advertisements are back on the campaign trail – and gunning for Gordon Brown. Ivan Fallon reports

The Saatchis are back, which means the 2010 general election campaign is getting up steam and the battle of the advertising agencies has already begun.

The simple announcement that M&C Saatchi, the reincarnation of the old Saatchi & Saatchi, had been appointed by the Conservative Party as its advertising agency attracted all the old controversy which surrounds the Saatchi name, made the front pages and raised hackles in the Labour camp, which knows only too well what to expect.

They didn't have to wait long. Within days, the posters featuring a clean-cut (and airbrushed) David Cameron had been replaced by vintage Saatchi ads: a grinning Gordon Brown above captions such as: "I took billions from pensioners – vote for me" appeared nationwide, running immediately into objections and complaints of foul play.

It's an indication of what is to come. The Saatchis don't do positive ads at election time, reckoning they're a waste of space. "I've yet to see a brilliant positive poster," says one of the team. "No one remembers them. What they remember are the negative ads, like 'Labour isn't working' – which is why they are so effective."

The current crop of posters, which some reckon is in danger of putting off as many voters as it attracts, bears all the hallmarks of the team which produced that famous "Labour isn't working" poster in 1978. That's not all that surprising, as they are the work of pretty much the same creative unit which has held together through all sorts of corporate vicissitudes, takeovers and tempting offers from rivals for the past 32 years.

The style has not changed noticeably over that period. When it appeared in the summer of 1978, the "Labour isn't working" poster broke all the conventions of political advertising, shot Saatchi & Saatchi to fame and was at least a factor (some still say the factor) in Margaret Thatcher coming to power in the 1979 election. That ad, arguably the most successful political advertisement ever made anywhere in the world, created a firestorm which hurt Labour in the polls at a critical moment in the election cycle.

After being dropped by the Tories following David Cameron's election as party leader, and seeing their old Saatchi & Saatchi agency hired by Labour, the real Saatchi team is back, albeit in a slightly different form. Charles and (Lord) Maurice, founders of the original Saatchi & Saatchi agency in 1970, were ousted in the 1990s but immediately formed a new agency, M&C Saatchi, keeping the key team which had been with them from the start. The brothers, so critical to the early Thatcher campaigns, are this time taking a back-seat, Charles because he has basically given up advertising to concentrate on his art collection, and Maurice because he is out of sympathy with the Cameron Tory party.

But that still leaves their old partner, Jeremy Sinclair, one of the mostly widely respected creative executives in the business, and the man behind the ads which ran in three successive Thatcher elections (and victories). Some of the original creative team from 1978 have moved on or retired, but the kernel is still there, older and (maybe) wiser, still as keen as they ever were to do battle.

In their office in Soho's Golden Square they are said to be working on a campaign which will focus largely on Brown personally and what one of the party's campaign team describes as "the unmitigated sins committed by this two-faced so-and-so". Saatchi research has identified Brown's personality and record as the weakest link in the Labour armour, and the aim is to go for it. The new ads are certainly doing that, with their fairly savage captions: "I caused record youth unemployment – vote for me", "I let 80,000 criminals out early – vote for me" and even the cheeky "I increased the gap between rich and poor – vote for me." The Conservative Party name and symbol only appear at the bottom, much as they did in 1978, the first time that had been done.

The next stage will be the party political broadcasts which are at the draft stage, and they promise to be even more hard-hitting than the posters. They are currently being tested and the research is said to be a "dream" as far as targeting Brown is concerned. But veterans of previous campaigns have seen how quickly and effectively the Labour Party, particularly under Peter Mandelson who has masterminded most of the elections of the past 20 years, can hit back. Even in 1979, when the impact of the early Saatchi ads had worn off, Labour outgunned them.

Nonetheless, the Saatchi team has gone back to its roots and to some of the themes which ran brilliantly but spasmodically through the 1980s. Saatchi & Saatchi were the pioneers of a new kind of political advertising when they were appointed by the Conservative Party in March 1978 by Gordon Reece, the man widely credited with remaking Mrs Thatcher's image. Up to that time, the political parties relied on unpaid volunteers from the industry to make their ads on a shoestring. But across the Atlantic, political campaigns, starting with the Nixon-Humphrey presidential race in 1967, had become highly professional, and after losing two Conservative Central Office was determined to learn the lessons.

Reece, who had worked in television in California, persuaded his reluctant chairman, Lord Thorneycroft, to hire a full-time agency on a proper professional client-agency basis, and Saatchi & Saatchi, the hottest agency in town, got the account. Relatively unknown at the time, by the end of the year they would be the most talked-about agency in the advertising world.

Saatchi was given the immediate task of producing an advertising campaign which would run through the summer months of 1978, based on Reece's certainty, shared by most of the political pundits, that Labour premier James Callaghan would call an autumn election. The Lib-Lab pact was falling apart and without it Callaghan seemed unlikely to be able to soldier on past October. "My experience of politics," said Reece later, "was that during the summer months governments do extraordinarily well, particularly if it's warm. Therefore I wanted to hit them with everything we'd got in August so they didn't start ahead in the polls in September. But it was now March and we had to get things moving quickly."

The announcement of the Saatchi appointment made all the front pages then, sparking a debate which dragged on for weeks about the ethics of selling politics "in the same way you sell soap powder". What did these young men know about politics? Actually, remarkably little at the time, although they soon learned. Their first party political broadcast, which ran in June 1978, was probably the best they were ever to make.

Scripted largely by Sinclair, it broke with the traditional talking heads political broadcast with a clever, witty and beautifully edited mini-film, depicting everything in Britain going backwards. There were shots of commuters walking backwards across Waterloo Bridge, of Stephenson's Rocket steaming in reverse, of a Comet passenger jet landing tail-first and climbers inching their way down Everest. Michael Heseltine, one of the heavyweights on the Tory front bench, appeared at the end to intone: "Backwards or forwards, we can't go on as we are." Party political broadcasts would never be the same again.

By midsummer the Saatchi team was ready with its next ad, the one which would change the political landscape and which is today studied by every advertising student in the world. Sinclair had produced a series of posters which (now Lord) Tim Bell, who was the young account manager, showed to Reece before steeling himself to see Thatcher. One of the posters immediately caught his eye – a picture of a dole queue snaking out from an employment office and disappearing into the distance. The title read: "Labour isn't working", and underneath, in tiny type, was "Britain's better off with the Tories". Reece seized upon it. A few hours later the two men went off to the Opposition Leader's room in the House of Commons for Bell's first presentation to Thatcher.

Thatcher was legendarily difficult to present to, and Bell, although they would later become (and remain) very close friends, barely knew her. One of the most skilful presenters in the business, he expertly flipped through the first ads, keeping the best until last. Although she was instantly sold on it, Thatcher raised one objection, which would be echoed by Thorneycroft and others in the party: why was the name of the opposition the biggest thing on the poster? Why were they promoting Labour? "We're not," replied Bell. "We're demolishing Labour."

When the ad appeared in August, government ministers hit the roof. Denis Healey, Chancellor of the Exchequer, complained bitterly about the Tory tactics, and in the silly-season the press gave the story front page coverage day after day. The more the Labour party attacked it, the more publicity it got, and the more the polls turned against Labour. The myth is that the ad ran nationally for months, but in fact it only ever appeared on 20 sites for a very short period at a cost of only £50,000.

Tory strategists later reckoned they got over £5m worth of publicity from it, and Saatchi probably got even more. It was to make the reputation not just of the Saatchi brothers but of Tim Bell, one of the most influential figures in advertising industry for the past 30 years, and a crucial influence on political strategy through the Thatcher years.

The ad was back in the news a few weeks later when Healey claimed the dole queue was not real but was composed of Saatchi employees. "Absolutely untrue," said Bell calmly, keeping quiet about the fact that it was actually made up of Young Conservatives from South Hendon. Healey had got it confused with another ad, which was composed of Saatchi employees.

When the furore was at its height, Callaghan was on his farm in Sussex helping with the harvest, and trying to decide whether to go for an autumn or a spring election. Speculation and rumour was at fever pitch in the media and even his own Cabinet, which he had promised to brief at its first meeting after the recess on 6 September, was in the dark. Several MPs had already packed their things and given farewell parties, believing they would not be coming back after the recess. The whips and leading members of the party briefed the Prime Minister daily with conflicting views and advice, and Michael Foot, the most vociferous voice in the party, urged him to wait until spring.

Callaghan later revealed that he came to his decision in those weeks on the farm, marking 5 April, the last day of the tax year, in his diary as the likeliest date. On 18 August he invited himself over to Denis Healey's neighbouring farm. "It was a lovely summer's day and we sat in the garden while I told him what I had decided," he wrote later. On 5 September he addressed the Trade Union Congress at Brighton where everyone expected him to put them out of their misery, but he teased them with a little ditty about the bride being left in the lurch at the church, and left them as confused as ever. "I made a mistake in allowing the speculation to build up," he admitted afterwards.

Two days later he finally went on TV to announce: "I shall not be calling an election at this time."

What he was not to know was that the polls, after their unseasonal lurch to the Tories, would soon swing back, putting Labour ahead by October, and stretching the lead to 5.5 per cent by November, good enough for the clear majority which eluded Callaghan through his premiership.

A few weeks after that came the "winter of discontent", with the unions humiliating the government, sweeping aside its incomes policy which had tried to hold pay increases to 5 per cent. On 22 January 1979 a million local government workers staged a day of action, and in Liverpool even the gravediggers were on strike and the bodies unburied. In March Callaghan lost a vote of confidence in the House, the first time that had happened since Ramsay MacDonald's defeat in 1926, and was forced to go to the country. And the rest, as they say, is history.

In the post-mortems that followed, the "Labour isn't working" ad featured high up the scale in the factors which had influenced Callaghan in the summer of 1978. Thatcher, in interviews she gave afterwards, acknowledged its importance in those critical summer months of 1978 when her political career stood on a knife-edge. Now the team which produced it is back in action again. How effective will they be this time? It's going to be interesting to watch.

Ivan Fallon is the author of The Brothers, the Rise and Rise of Saatchi & Saatchi, published in 1987, a biography of the Saatchis up to that time