He failed to win the selection for the Conservative nomination at the Louth byelection of 1969, and for Cities of London and Westminster for the general election. However, with Central Office support, Davies was found a seat at Knutsford in Cheshire, which he easily won in the general election on 18 June 1970. That October, Davies was promoted to be Secretary of State for Trade and Industry, a new department set up by Heath. He introduced himself at the Conservative Party Conference with a speech which reiterated Heath's pre-election policy of refusing to intervene in industry. The phrase most closely associated with him was said in the House of Commons on 4 November, when Davies said:  "We believe that the essential need of the country is to gear its policies to the great majority of people, who are not 'lame ducks', who do not need a hand, who are quite capable of looking after their own interests and only demand to be allowed to do so." ("Hansard", 5th Series, volume 805, column 1211)  The term "lame ducks" became associated with Davies. However, when Rolls-Royce (a vital defence contractor) ran into financial difficulties early in 1971, it was decided that the government should help by bailing it out. When nugatory efforts did not help, the company was nationalised to prevent it from going bankrupt. In June 1971, the Upper Clyde Shipbuilders went into receivership after the government refused it a £6 million loan. The workers at the yard, led by Communist shop stewards, decided to hold a 'work-in' when they occupied the yard and continued production. This industrial action tended to refute claims that trade unions were work-shy and was therefore embarrassing to the government. Davies' London home was firebombed by the Angry Brigade on 31 July 1971. In February 1972, the government changed its policy and decided to retain three of the four shipyards at a cost of £35 million, although Davies knew they would never operate on a commercial basis. Davies moved sideways to become Chancellor of the Duchy of Lancaster in November 1972, with special responsibility for British relations with the European Community which Britain joined on 1 January 1973. Davies' role was predominantly behind the scenes in making sure British law was in compliance with European law. In Cabinet discussions, Davies advocated a confrontational approach to the trade unions, although he feared for the future. After Heath left office in 1974, Davies retained his Parliamentary seat but was not given a post in the Shadow Cabinet.