Billy is distraught that Julie has moved house without telling him, taking Francesca, but Adrian and Jack are both smitten by the new occupant, the sophisticated, older Leonora. The whole family rallies when their dog Mongy is killed and scatters his ashes at the Pier Head whilst Oswald has to play midwife when Aveline's baby arrives early.
As Aveline and her baby daughter return home from hospital the boys fall over themselves to help Leonora move in and Jack is jealous when she gives Adrian a job as her chauffeur. Joey rents a shop from where to sell the produce Freddie grows on his allotment but is dismayed to find that Lilo Lil is still very much in the picture.
Shifty gets a job as a bus driver though Nellie is unhappy with Aveline for giving him a reference whilst Lilo Lil tells Freddie that she is terminally ill and Leonora and Jack finally give in to their feelings for each other. Suspicious that there are family secrets Nellie is thus taken aback when Derek phones her out of the blue.
Romance is in the air as Shifty wins back Martina - though in his elation he drives the bus onto the motorway - and Jack continues dating Leonora. Nellie might disapprove but succumbs to another meeting with Derek after realizing that Freddie is back with Lilo Lil. Aveline and Oswald are less loved up when he accuses her of vanity as she yearns to return to being a model.
After rowing with Oswald Aveline returns to the family with baby Tracey Ursula whilst Joey finds that his shop has been vandalized and his produce stolen and Adrian is upset to learn that Jack is dating Leonora. Needing a break Nellie goes to lunch with Derek but draws the line at staying the night with him in a hotel.
Billy complains that the other family members pick on him so he moves into Freddie's shed, from where he is rescued by Joey, having seen that his father is back with Lilo Lil. Joey himself, having recovered his stock, opens his shop and phones Roxy to tell her whilst the now unemployed Shifty is given a last chance by Martina. Nellie decides to go away with Derek after all but the family, unaware of her plans, innocently manage to thwart her from going.
Nellie finally gets away with Derek, though they sleep in separate rooms. With Nellie away Aveline takes charge of the cooking, strengthening the family's view that she should return to Oswald. Cantankerous Grandad has a fall, fracturing his hip and is taken to hospital. Joey looks for a contact number for his mother in order to put her in the picture and comes across a romantic note from Derek.
There are positives all round as Adrian, in the money after his poems are turned into a musical, buys everybody presents, Jack moves in with Leonora and Aveline and Oswald have a heart to heart. The newly recovered Grandad meets old flame May, whose grand-daughter Irenee has an effect on Billy whilst Joey smiles as he spots Nellie in town with Derek.
Adrian is now dating Irenee and doing his best to overcome her lack of interest in culture whilst Joey tells Nellie he knows about Derek. He persuades her to invite Leonora to dinner but Leonora is uncomfortable and refuses. Aveline gets back into modelling but Granddad's memory lapses give the family cause for concern.
Concerned about Granddad's memory problems the family gets him to see a doctor but he makes a break for it and heads off to Wales in a taxi to relive old times, needing to be brought back to Liverpool. Jack begins to have doubts as to whether or not to move in with Leonora but Aveline and Oswald have a civilized meeting and it looks as if they might be getting back together again.
Jack collects the last of his stuff from his room, Aveline joins a protest to save the Liver Birds, Shifty turns up after his three month sentence, Joey has to abandon a lady friend when Grandad goes on another walkabout, Billy asks for help to buy a new sandwich van, Lilo Lil heads back to the shed after selling up in Ireland, and Derek announces that he's planning to move to London to be with his daughter.