On the advice of his political adviser, P.M. Hacker plans to eliminate the National Education Service and let parents choose the schools their children will attend. Horrified, Humphrey must prevent the precedent being set of eliminating unnecessary bureaucracy.
The Prime Minister finds himself in a bit of a pickle when he flatly denies in the House that the government has bugged MP's telephones. It turns out the government was and Sir Humphrey was aware of it. The PM wants Sir Humphrey to back him, but he refuses to participate in a cover-up. The shoe is on the other foot however when Sir Humphrey makes unwise comments to a radio interviewer thinking that the tape recorder has been turned off. The PM agrees to help him, for a price.