Alf and Ivy are settled into their new jobs but things soon hot up when Sir Ralph suspects that his wife, Lady Agatha, is having an affair. Lord Meldrum's car is vandalised – someone has daubed the word "fornicator" on the side which causes a panic when the Bishop wants to use the vehicle.

Lady Lavender sends for her solicitor whom she instructs to give Ivy her shares from the Union Jack Rubber Company. James is tortured by thoughts of Miss Poppy after she asks to feel his muscles. Then Lavender sends for her solicitor again.

Lord Meldrum thinks that Lavender has gone too far and wants her declared mentally unstable, whilst Teddy is determined to pay Ivy a visit in her room no matter how dangerous the route. A party, thrown for Miss Cissy's birthday, brings a few surprises.

Lady Lavender has now promised her shares to Stokes, and he sees this as a chance to set himself up for life. Meanwhile, Ivy is in trouble for telling Sir Ralph about his wife's indiscretions with Lord Meldrum.

Alf is being blackmailed by the local pawn broker into letting him burgle the house. Lord Meldrum allows Cissy & Poppy to hold an evening of progressive poetry in the dining room. At last the relationship between Alf and Ivy is revealed to James.