In this episode, Ciara Kelly and Andrea Gilligan discuss how PM Thatcher pushes through significant spending cuts in her first Budget, against opposition from some colleagues. The Thatchers spend an awkward weekend with the Royal Family at Balmoral, and take a dislike to them. Charles continues to confide in Camilla; she encourages him to pursue Diana. Diana is invited to Balmoral and makes a good impression on the family, who push Charles to think about marrying her, despite his reservations. Mrs Thatcher reshuffles her Cabinet to dismiss her opponents.