They said Labour isn't working. Now Saatchi & Saatchi works for Labour

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Saatchi & Saatchi, the advertising agency that helped to bring down a Labour government 28 years ago, has been hired to help Gordon Brown win the next election. The agency won the contract to handle the Labour Party's advertising account with a poster design that plays on the new image that the Prime Minister wants to convey.

It suggests man of substance rather than spin. Alongside a photograph of a thoughtful Mr Brown is the four-word slogan "Not flash, just Gordon."

Labour has been seeking an advertising agency since last month, when rumours were rife that Gordon Brown might opt for an autumn general election.

The most famous political slogan ever to emerge from the Saatchi & Saatchi agency – and one of the most famous in recent political history – was the Conservative poster that helped Margaret Thatcher to victory in 1979, featuring a winding dole queue over the devastating message "Labour isn't Working".

It was the first time that a British political party had employed an advertising agency, and brought Saatchi & Saatchi the equivalent of millions of pounds' worth of free publicity, helping it to become one of the world's leading agencies.

Labour's decision to hire them, which took the advertising industry by surprise yesterday, is another break with the Blair era. They won the contract ahead of Trevor Beattie, a friend of Peter Mandelson, who contributed to all three of Tony Blair's election victories. For the 2005 campaign, Mr Beattie suggested a pastiche of the old Saatchi slogan – "Labour is Working".

Douglas Alexander, Labour's general election co-ordinator, said: "I can confirm that we have appointed Saatchi & Saatchi, and we are delighted to have them on board."

For the advertising company, which lost a chunk of its market when it parted company with the Saatchi brothers in the 1990s, there is now the prospect of recapturing some of its former prominence.

An editorial in Campaign, the advertising trade magazine, said: "The idea of the agency that packaged Thatcherism turning its hand to Brownism is incredibly provocative. Political advertising accounts don't make an agency rich. But they can change fortunes and create fame, as Maurice and Charles Saatchi found out. Can Saatchi do it again? With Labour? The pitch work, which shows a picture of Gordon Brown with the line 'not flash, just Gordon' is a great start."

Robert Senior, Saatchi's chief executive, said: "This is a seminal moment for Saatchi & Saatchi. It's a real statement of intent for the agency. We have the opportunity take the strength and conviction that Gordon Brown has shown as Prime Minister and apply our creativity to that to do the right thing for the country."

Although Saatchi & Saatchi was once synonymous with the Conservative Party, the main link ended in 1994, when Maurice Saatchi was dismissed by the firm he and his brother Charles had created.

The brothers set up a rival firm, M&C Saatchi, taking several senior personnel and key clients with them, and continued the association with the Tories. Maurice Saatchi, now a Tory peer, was the party's co-chairman during Michael Howard's period as leader in 2003-05.

The account came to an end after David Cameron became party leader, amid rumours of a sharp difference of opinion over the new direction in which Mr Cameron was taking the party. In July, Lord Saatchi warned the Tory leader against pursuing what he called "nicey-nicey" politics, a reference to Mr Cameron's campaigning on issues like the environment. "Nothing will happen until the Conservatives have something compelling to say about the subject that matters – economics," he said.

The Conservatives are expected to approach advertising agencies at the end of this month to pitch for their general election advertising account.