After touring comes to an end, little progress has been made. The girls' various affairs create significant fallout with their established partners, and a fair amount of hypocrisy on their partners' parts is exposed. Finances are all but gone, so through a contact of Q's, the girls end up performing in a softcore porn film. In the meantime, Q's partner Carl has gone through a huge transformation from lazy layabout to cutthroat businessman; this is due to his meeting Greek entrepreneur Stavros, who has decided to manufacture his surfboard design. Carl talks the girls into meeting Stavros, who he thinks may be the answer to their financial problems. Anna's boyfriend Jack is discovered in bed with one of Dee's commune girls.

The single flops, and Anna tries to pin the blame on the fact that her harmonies had been redone by Dee, something that Q had not realised. Anna writes a new song, "Loose Change", and since the band 'owes' her, she is given more space to develop it and sing lead, unaware of its low quality. Kitty strikes a deal with obnoxious entrepreneur Johnny Britten for the Little Ladies to become the nightly house band at the Electric Empire, Britten's Watford club. The fact that Dee is clearly the best singer becomes evident when, for Anna's song, she performs backing vocals with Q — Kitty subsequently changes the lineup so that Dee sings the main vocal, and things sound much better, creating new discourse.

The new single is ready, and Schreiber's hype machine kicks into action. There are T-shirts, badges, caps and even a set of Little Ladies dolls. The band embark on a nationwide promotion tour by InterCity train, accompanied by various freeloaders from the music press and radio stations. In a series of interviews, the distance between the liberated Ladies and the distinctly unliberated mainstream media is highlighted: one interviewer insists on repeatedly asking Dee whether she has a 'steady boyfriend', while other interviewers are more concerned with showing off their own grasp of the music business than actually finding out what the Little Ladies are about.

A trio of struggling actresses—Q, Dee, and Anna—decide to audition for the West End play Broadway Annie, a nostalgic indulgence of its director. The show flops, despite a last-ditch effort by its producer to update it and make it raunchier. The three women, from different personalities and backgrounds, are drawn together by their shared catastrophe. The show's musical director, Derek Huggin, tells them they should form a rock band, with him as manager and songwriter.

The Little Ladies tour pubs, clubs and dive bars of provincial Britain. The band is still raw and often fails to live up to its adopted image of no-nonsense rockers. Despite this, the girls realise that playing in front of an audience gives them an incredible buzz, which makes all the travelling and lack of money worthwhile. It's not all plain sailing, as in some venues they receive a very hostile reception. Meanwhile, Anna has a brief affair with Derek; Q meets Nigel, a freelance rock journalist; and Dee has an admirer in the form of Dave, an audience member who becomes a sort of groupie.

The band are on another pub tour, this time without any manager. Harry Moon, a fan and songwriter, becomes the band's new musical driving force—although now the girls are writing many of their own songs too. To make ends meet, they do a musical ad for a range of frozen foods called 'Wonder Woman', whose brand image is that of female liberation—though this comes in the consumerist form of microwave ready meals. Moon knows an established rock star Stevie Streeter, and arranges for the band to meet him with a view to becoming his support act. Streeter's act is described as 'sub-Springsteen concept rock', but the reality is far worse.