After Heath left office in 1974, Davies retained his Parliamentary seat but was not given a post in the Shadow Cabinet. He resumed his directorship of Hill Samuel. From May he took the Chairmanship of the European Scrutiny Committee of the House of Commons, examining the details of legislation, and won a strong reputation for looking in detail at the regulations coming out of the EC institutions. In 1975, Davies campaigned for a 'Yes' vote in the referendum on EC membership.