Hmmm, might still be slightly too fascist in style, when the look I'd probably be going for would be traditional UK labour movement banners - which tend to be quite detailed and have slogans and various symbols on them.
I'll see if I can dig up some good examples in the correct format, or else try to convert the flag on the propaganda poster into something useable as a base to make a HOI2 flag out of!
EDIT: Aha, here's a reasonable one:
It's doubtful that the writing would come out very well on the actual flag, so it doesn't really matter what it says!
And maybe make the symbol in the middle a bit larger - they've actually got something similar to CCurio's idea, with a torch, a spade and a bit of wheat (I think...) -> So this could be something good to use for Britain, to highlight that they are similar to the global syndicalist movement, but have some differences...