Harriet has moved to Holland to take up a teaching job. With the tenement blown up, Harvey and Lou end up in a doss-house but Harvey gets himself and Nan a flat in a house owned by Jewish refugees the Gottliebs. Lou contracts tuberculosis and Maggie blames Harvey for leaving him behind. Rita, working behind the bar in a hotel, is romanced by a charming ex-RAF type who turns out to be murderer Neville Heath.

With Lou in a sanatorium, Maggie starts to train in nursing. Harvey gets a letter from Harriet to say she is engaged to another man, but Rita quickly recovers from her ordeal with the murderer when Monty returns from Liverpool and pays her to host card schools. Harvey comforts landlady Frieda Gottlieb after her synagogue is fire-bombed in reprisals for the King David hotel in Israel. In gratitude, she gets her brother to bake Stanley a birthday cake.

Denied time off work to attend the Labour party Conference in Brighton with fellow councillor, solicitor Dick Elliott, Harvey quits his job but gets offered work by Dick as well as hearing a German address the delegates. Maggie moves into a nurses' home when Monty fills the prefab with his black market wares but also gives notice after being bawled out on the wards whilst Stanley learns to box and turns the tables on a bully at his new school.

After a visit from Monty's pregnant girlfriend, Rita dumps him and goes out with the charming, urbane Leo Brandon, who has employed Maggie in his hat shop, only to be told that he is gay! Maggie is also dated by the well-spoken, well-educated Tom. Harvey starts work with Dick and his father in their law firm, falling foul of officious chief clerk Ryder but persuading the firm to act for the Gottliebs in their efforts to free a young Jewish friend arrested by the British for trying to enter Palestine.

Having thrown Tom over for Lou, Maggie is devastated when a letter arrives from Scotland to say that Lou is now dating his convalescent nurse. The last member of the family for whom she once worked has died, leaving her an old car. With Frieda to supervise Nan drives Maggie, Stanley and Harvey back to the house where she worked, where Harvey and Frieda kiss and Harvey learns a secret from Nan's past. However the car breaks down so Nan sells it. Rita agrees to stay friends with Leo and buys into a hair-dressing salon whilst Stanley wins a school essay competition with a story based on Nan's little secret.

Christmas is coming, and Harvey clears the air with Ryder whilst Rita takes over the running of the salon and Maggie gets back with Tom, to the dismay of her annoying friend Veronica. The Gottliebs' teen-aged compatriot Yossela moves into the house but he is deeply disturbed by his wartime experiences and behaves erratically, slashing a portrait Frieda is painting of Harvey as he is jealous of their growing relationship. Ultimately, with Tom's help, he is put onto a ship bound for Palestine and, with peace restored, Nan kisses Erich under the mistletoe.

It's the coldest winter for fifty years and, whilst Harvey gets cosy with Frieda, Rita is feeling the bite. Firstly, after Stanley's headmaster has visited and had to stay the night on the sofa after being snowed in, she has to contend with his irate wife.Then the water mains freeze up, closing her salon when she is in debt to the landlord. Leo writes another cheque, but his possessive mother cancels it. Fortunately, Veronica is so keen to work with Rita that she is prepared to lend her her life savings.

The Moons are unable to pay for Stanley to go on a school outing, but Harvey's pride causes him to turn down the headmaster's offer to finance him from school funds. Orthodox Erich, disapproves of Harvey dating Frieda and refuses to support his anti-Fascist meeting, though Harvey's tolerance almost stops short of Leo when he finds out from Maggie that he is gay. However the two men are reconciled at the dog track where Leo's greyhound is racing and where Harvey is robbed of his winnings by two Black Shirts who attended his meeting. Monty Fish helps him to turn the tables on his attackers as well as helping him to get on the right side of Erich.

Harvey feels that Stanley is getting out of control and wants him to move in with himself and Frieda for when they are married. However, Frieda's paintings attract the attention of Jewish gallery owner Adrian Horowitz, and she seems set on her own career. Rita considers a divorce before going on holiday with Leo to the South of France following his mother's death. Nan meets Geoff, an old flame now a widower, who proposes marriage to her.