Episode 1:

The Labour Party wins a general election on a left-wing platform of increased public spending and the removal of US military bases from Britain. In his victory speech, new Prime Minister Harry Perkins, a charismatic ex-steelworker from Sheffield, castigates the media for their attacks on him. Meanwhile, the markets fall. Thompson, a journalist jailed for a refusal to reveal his sources, is released from jail and is invited by Perkins to become his press secretary.

Rejecting his car, Perkins returns on foot to Downing Street from his meeting with the King. In his conversation with the US president, Perkins abandons his script and tells the president that it is his intention to get rid of US bases in Britain. An American woman called Chambers is secretly taping Perkins' telephone conversations.

Perkins appoints his cabinet: the radicals Cook and Newsome as Home and Foreign secretaries, and the moderate Wainwright as Chancellor of the Exchequer. Fiennes, a civil servant, looks up the personal details and political histories of the new cabinet on a computer. Later, he meets Chambers, who warns him away from 'freelance' activities. Thompson replaces the system of off-the-record briefings with open press conferences.

While Newsome travels to Sweden, Perkins welcomes the US Secretary of State, who tells him that the UK's withdrawal from the Western Alliance will be considered hostile, and threatens financial pressure. When press baron Fison attacks Perkins, a senior BBC figure instructs the political editors not to give the public the impression of a crisis. The pressure on the economy forces Wainwright to meet with the International Monetary Fund, who offer a rescue package dependent on a massive trimming of the government's public spending plans.

In cabinet, Wainwright defends the IMF's offer, but Perkins receives a call from Newsome on his return from Sweden, telling him that the International State Bank of Moscow have agreed to lend money to Britain, borrowed from oil-producing countries outside the West. Wainwright is irritated that he has been used as a cover while Perkins and Newsome plotted, but the financial crisis has been averted without damaging the new government's spending plans.