Saatchi & Saatchi: The agency that made Tory history

The brothers from Baghdad were virtually unknown when their brilliant ad campaign rocketed Margaret Thatcher into power. Ivan Fallon looks back

The headline that the advertising (and political) world never thought it would see appeared in Campaign last week: "Labour turns to Saatchis". Saatchi & Saatchi, the advertising agency so integrally associated with the Conservative Party, in particular the three successive electoral victories of Margaret Thatcher, had been appointed to handle the Labour party's advertising account in the next election.

Thirty years ago, Saatchi & Saatchi made history with a political poster that is probably the most effective ever produced. It showed a dole queue snaking out from an employment office and disappearing into the distance. The title read: "Labour isn't working", and underneath, in smaller type, "Britain's better off with the Tories". It was to change the course of politics in Britain, end the career of Prime Minister Jim Callaghan, and usher in the Thatcher era and 18 years of Tory rule.

Of course, the Saatchi & Saatchi of today is not the Saatchi & Saatchi of 1978. Then, it was a young, ambitious and trendy agency that had been founded only eight years before by two remarkable Baghdad-born brothers, Charles and Maurice Saatchi. Neither was remotely interested in politics. To them, the Conservative party was simply another account – albeit a high-profile and prestigious one – that they would run like any other.

When they were appointed in March 1978, they were almost unknown outside the advertising world. Even within it, they were regarded as precocious upstarts who were never going to challenge an industry then dominated by the big Madison Avenue agencies. Six months later, with the controversy over the "Labour isn't working" ad dominating the news agenda, they were household names. Three decades after that, Maurice (by that stage Lord) Saatchi was co-chairman of the Conservative party.

The Saatchi & Saatchi agency appointed by Labour no longer contains a single Saatchi. In 1994, they were forced out of the business that they had founded and in 18 years grown to become the biggest advertising business in the world. The brothers now have their own more modest business, M&C Saatchi, which worked for the Conservatives in the last election; their old company has been consumed into the maw of a multinational.

But the Saatchi political campaigns have become the stuff of legend, studied by aspiring politicians and young people hoping to make their career in the advertising industry. Before them, there was no tradition of British political parties hiring advertising agencies to run election campaigns; ads, such as they were, were designed by enthusiastic supporters for free.

In the United States, however, the Johnson and Nixon campaigns had used professionals to considerable effect. Thatcher, approaching her first election, was persuaded that a bright, creative agency could make all the difference. She was right. But there are as many myths as truths about the actual role of the Saatchis. They were credited with changing her voice and her hairstyle, designing her wardrobe, guiding her every move and acting as her closest advisers and confidantes. The truth, though, is that the reclusive Charles Saatchi – at that stage the creative force behind the agency – never met her, and declined even to attend the celebratory party that she gave at 10 Downing Street when she finally got there. To this day, they have never shaken hands.

The restyling of Thatcher was largely done by Gordon Reece, her director of communications – and by herself. And, as the years rolled on and election was followed by election, there were many hands in the campaigns, which by 1987 had become bloody, savage wars between opposing sects fighting for Thatcher's ear.

Yet, there are some truths, too. For instance, before she became prime minister in 1979, Thatcher had never properly defined "Thatcherism". The buzzwords were freedom, choice, opportunity, and prosperity, and there were catchphrases such as "roll back the frontiers of government". But no one had clearly set it all out in the form of a simply understood document. The Saatchi brothers, from their earliest days in the business, reduced new accounts to a simple, logical flow, using the simplest of words and as few of them as possible. Six months before the first election, the cerebral Maurice, politically naive and agnostic when it came to political parties, tried to put down on a single sheet of paper the philosophy he was required to project. Diffidently, he proffered the finished product to the party chairman, Lord Thorneycroft, expecting it to be shredded. Instead, Thorneycroft handed it back to him with the remark: "Well, if you can convince people of that, that's it." It was, as another Tory grandee later remarked, "a very good exposition of what became known as Thatcherism". That exposition became the basis on which the next three campaigns were fought.

Some of the early ads that the Saatchis produced were brilliant – and some later ones were dire. Their first effort, four months before the dole queue one, was Saatchi at its creative best. Under the slogan "Britain is going backwards", it had shots of people walking backwards over Waterloo Bridge, Stephenson's rocket steaming backwards, the Comet, the world's first jetliner, landing in reverse, climbers inching their way down Mount Everest and the voiceover of Michael Heseltine: "Backwards or forwards, we can't go on as we are".

The five party political broadcasts that ran in the 1979 campaign a year later lacked the spark of the earlier efforts, but they were still better than what went before, and Thatcher ran to an easy victory in the May 3 election.

By the 1983 election, the Saatchis were rich and famous, their focus on the world-wide empire they were aggressively creating. They had made the "World's Favourite Airline" campaign for British Airways, including the iconic Spielberg-esque ad showing the island of Manhattan, its 1.2m population aboard as passengers, making its final approach to Heathrow Airport, with the slogan: "Every year, British Airways flies more people across the Atlantic than the entire population of Manhattan". The campaign was to win many awards, adding to the hundreds the agency had already chalked up. But their whole output was, at best, patchy.

By the 1987 election they were richer still, and there were younger and hungrier agencies fighting for their slice of the Tory cake. The Saatchis made some great poster ads – one showed a soldier holding up his hands, with the slogan: "Labour's policy on arms" – but they were never able to live up to the expectations created by that first campaign. This was at least partly due to the fact that in 1983 they were defending a Government that had been in power for four years, and in 1987 in power for eight. In 1979, everything had been new; Thatcher was the Opposition leader, and the worst that could happen was that she stayed it.

Labour was also quick to learn. By the Blair years, under Peter Mandelson, the party's campaigns were comfortably out-Saatchiing the Saatchis. Today, Charles continues to build what is arguably the most important collection of modern art in private hands, while Maurice is out of sympathy with the modern Tory party, in which he plays no part.

Political party accounts no longer have the cachet that they did in 1978, and campaigns are run more by committee than by creative copywriters with damp towels around their heads. The Labour party has much to curse the name Saatchi & Saatchi for – and Mrs Thatcher to thank it for. But the big winners have been the Saatchi brothers themselves, who were catapulted to the big time in that exciting political era nearly 30 years ago.

Ivan Fallon, chief executive of Independent News & Media UK, is author of The Brothers: The Rise & Rise of Saatchi & Saatchi

That infamous ad

The famous "Labour isn't working" ad was not written by Charles Saatchi, as is often believed. It was the work of a young copywriter named Andrew Rutherford, later the "R" in the agency WCRS. Charles rejected the ad, but Rutherford secretly re-inserted it into the presentation to Margaret Thatcher, then leader of the Opposition.

Thatcher was never easy to present to, and when she was shown the "Labour isn't working" poster, she stopped them. She gazed at it for some time, then exclaimed "wonderful".

The poster ran in August 1978, a critical time for the Government of Jim Callaghan, who was deciding whether to call an election for October. The ad created an immediate sensation. In the middle of the silly season, the media seized on it as the topic of the day. Government ministers hit the roof.

Then, just as the controversy was dying down, the chancellor, Denis Healy, re-ignited it with the accusation – one Saatchi denied – that the dole queue was actually a line of Saatchi employees.

By September, the Tories were ahead in the polls, and Callaghan decided to delay the election. It was one of the biggest misjudgements in British political history: the "winter of discontent" of 1979 saw the biggest industrial disruption since 1926, with rubbish piling up and bodies going unburied. In March, after his famous "Crisis? What crisis?" remark, Callaghan lost a vote of confidence in the House of Commons, was forced to call an election and was thrashed by Thatcher. The rest is history.