1948 starts badly for Harvey when the local Labour Party, unsympathetic to his recent troubles, accuse him of bringing them bad publicity.

Feeling that Dick has not supported him Harvey offers his recognition from the firm though he reconsiders when Leo, set up by jealous ex-boyfriend Joshua, is charged with importuning and Dick asks him to prepare a defence case. In court Rita gets Leo acquitted by claiming that they are lovers and, in so doing, provides Harvey with grounds for divorce on account of her supposed adultery.

Erich dies suddenly and Frieda is amazed to get a visit from Joan Gottlieb, a Gentile who married Erich in Manchester before Frieda came to England, and has evidence that she lent him the money for his first bakery. As she is still his legal wife she is claiming her rights, including the house, but Harvey, using his professional contacts, learns from a Manchester lawyer that Erich separated from her and so she is entitled to nothing.

Rita's supplier, Alistair, offers her a partnership making face cream but she refuses when she finds that she is expected to do all the work. Leo hopes to get a shop in the West End with Rita but it falls through.