Rosemary tries to gain a confession from Peter: Jack and Phyllis return from their honeymoon.
Rosemary resolves to divorce Geoffrey. Vicky is depressed, and there is disappointment for Liz.
Arthur can now reveal the offer of the post of Parliamentary Private Secretary to the Lord of the Admiralty.
Jack is stunned by Geoffery's call for his resignation.The Von Heynigs arrive without Klaus; Klaus and Vicky's possible engagement is discussed.
The von Heynigs return to Munich with Vicky and Laura,and Vicky witnesses a Nazi rally. Arthur, meanwhile, is characterised as a Nazi sympathiser in the press.
Peter becomes increasingly concerned for Laura.
Vicky missed Klaus, and Peter feels Laura's absence sharply. Capt. Julian Palmer is to move into the mill-house on the Layford estate.
Mrs Gates is involved in a road accident. Arthur's mother arrives at Larkfield, and there is a troubling call from London.
Laura's grandmother has died. With no word from Laura, Peter and Arther intend to go to Germany to look for her.
Laura returns, claiming no knowledge of the von Heynig's disappearance.
Jack announces that Geoffery will return to London after the launch of the Nice branch of Poole Aviation
Liz has disappeared after arguing with Gwilym; a search is launched on the Welsh border.
Gwilym searches for Liz, while Vicky is convinced her sister is dead.
Liz is safe. Gwilym is furious on being told that he cannot talk to her.
Liz tells Arthur of her dilemma. Peter tries to talk Laura out of the Spanish visit, Klaus returns.
Klaus describes his parent's arrest; Laura insists that they have been fairly treated.
Liz and Gwilym are reunited, and Lady Alice and Mrs Gates are feuding.
Alice apologises to Mrs Gates, and Liz is remorseful after spending a night with Gwilym.
Lady Alice is visited by a former beau, and a letter from Laura describes the miseries of the civil war.
Laura is injured and trapped in a village, Peter resolves to rescue her.
The selection of a new parish priest causes conflict.
Ralph takes Liz and Rosie to meet prospective parish priest Dieter, in the hope of changing Arthur's mind.
Vicky sees a way to marry Klaus, and former cadet Clive seeks Jullian's help in a delicate matter at the Admiralty.
Clive explains that he has been accused of spying for the Communists.
January, 1938: Lady Alice celebrates her 70th birthday surrounded by family and friends. Arthur defends his stand against Conservative policy, and Phyllis has surprising news.
Liz's medical skills prove vital in a difficult birth, and she also scores a tactical triumph when she takes Phyllis to see the baby boy. Elsewhere, Arthur lunches with journalist Angela again.
Rosie and Lady Mary Cranford have organised a Red Cross benefit concert, but with the pianist struck down by bronchitis, Vicky is persuaded to do the honours...
News of the Anschluss reaches Larkfield, while the situation of the happily pregnant Phyllis Poole contrasts sharply with that of an estate worker and his pregnant wife, who face eviction.
Nearby Ellesmore Estate is earmarked to be turned into a factory. Arthur joins the protest, but it is Angela who makes the conclusion an anticipated celebration for all concerned.
The gathering storm in the outside world is reflected in traumatic events at Larkfield, with a fatal road accident and tragedy for an estate worker causing concern for Arthur.
Phyllis tries not to worry about Jack, who is competing in the King's Cup air race, while a secretly married Peter and Laura share a blissful week in the South of France.
While the Bournes try to take their minds off the prospects of war with a light-hearted home movie, Arthur is angered by Government inactivity in the face of German re-armament.
It is now August 1938. Phyllis and Jack are preparing to leave for La Touquet with baby son William. Geoffrey's girlfriend has left him, and Nanny's behaviour is a cause for concern.
Arthur is horrified to hear that Liz has been arrested during an anti-appeasement march in London, and Laura and Peter find their wedding boycotted as a result...
Laura and Peter's wedding dominates the thoughts of the Bourne and Cartland families, but Arthur has deepening financial worries.
Preparations for war are all around. Jack expects to join the RAF; Peter receives orders to stand by; Laura plans to join one of the woman's services. Vicky is determined to follow Klaus to Germany...
Arthur is alone in voicing his reservations on the terms of the Munich Agreement. Vicky has discovered the truth about Klaus, and there is devastating news for Laura.