After being disgusted with the state of the Square and learning that a councillor has stood down, Peggy and Pat both decide to run for council and are interviewed by journalist Harvey Freeman (Martin Jarvis). Eventually they both pull out of the election, but Harvey hears of this and individually invites them both out. They both finally discover his two-timing, and humiliate him in punishment. When Phil prevents his daughter Louise (Brittany Papple) from contacting her mother Lisa Shaw (Lucy Benjamin) in any circumstances, Peggy interjects and Phil punches her. Believing that her son is an unfit parent and fearing for Louise's safety, Peggy takes Louise to Lisa against Phil's wishes. Although Lisa promises to allow Phil visitation, she flees with Louise. Phil blames Peggy for the loss of his child and begins using alcohol and crack cocaine. Peggy tries to stop Phil using crack by locking him in her pub, but Phil escapes and in a drunken bid for revenge, he sets fire to Peggy's pub (see Queen Vic Fire Week). Peggy watches in horror as it is destroyed. Realising her role in Phil's problems, Peggy decides to leave Walford for his sake. After saying tearful goodbyes to her family and making peace with Phil, Peggy takes one last look at The Queen Vic and leaves Albert Square.