Buckingham and Suffolk enter a parliament hall at Bury St. Edmunds, followed by York and Beaufort, then Henry and Margaret, then Salisbury and Warwick. Henry wonders where Gloucester is, but Margaret tells him he should take note of his changed countenance. He's become insolent and is always angry, never greeting anyone. She reminds Henry that Gloucester is next in line to the throne, so she advises him against allowing Gloucester near him or in his council. Gloucester has won the support of the common people through flattery, she says, and he can lead them into revolt when he so chooses. It is time to weed the garden, she insists, and she asks Suffolk, Buckingham, and York to back up her female intuition about Gloucester. Buckingham agrees that the actions of the Duchess show Gloucester harbored thoughts of treason; Beaufort reminds the king of Gloucester's strange punishments; and York mentions Gloucester levied large taxes during the French wars, though the money never arrived at its destination as pay for English soldiers.
Henry is dissatisfied and says that he thinks Gloucester is innocent of any treasonous thoughts and too good a man to plot evil. Margaret says Gloucester is even more dangerous since he seems so harmless; he is a wolf in lamb's clothing. Somerset enters from France to report that all the English lands in France have been lost. York mutters to himself in his dissatisfaction that more of his future lands have been lost.
Gloucester enters. Suffolk arrests him for treason, but Gloucester says he is not worried, since he has done nothing wrong. He asks of what he is accused. York says it is thought that Gloucester contributed to the fall of France by not sending money to France to pay the English soldiers. Gloucester says he did not steal any money but rather sent much of his own money since he didn't want to tax the commoners. York mentions the strange tortures for criminals, but Gloucester says he only tortured the worst criminals. Yet Suffolk insists there are still worse crimes of which to accuse him, and he reiterates his arrest charges.
Henry says he hopes Gloucester will prove his innocence. Yet these are bad times, says Gloucester, and virtue and ambition grow wild. He knows the other nobles want him dead, and if his quick death would spell the end of their tyranny, he would gladly die. But, he thinks, his death is just the prologue to their violent play following. He refers to Beaufort's malice, Buckingham's envy, York's ambition. Then, he turns to Margaret, accusing her of having heaped disgraces on him. He declares that all the lords have plotted against him, and he won't be able to prove his innocence because they will pack the court with false witnesses. Beaufort orders Gloucester to be taken away; Gloucester says that the king, thus, throws away his crutch before he has yet learned to walk alone, and he is led off.
Henry is distraught, saying that he believes Gloucester to be honorable. Yet the time has come when he will have to betray Gloucester because all the lords and his wife want Gloucester dead. Gloucester is harmless and innocent, insists the king, but there is nothing he can do to save him but to cry unhelpful tears. Gloucester's enemies are so powerful that even the king can't stop them. He exits with Salisbury and Warwick.
Margaret says the king is full of useless pity, and he is easily beguiled by Gloucester. Beaufort thinks it best for Gloucester to die, but he wonders what excuse they shall make for his death. Suffolk says they have no evidence against him but mistrust. So Suffolk suggests that it doesn't matter if he is accused of anything, he simply needs to be killed. They all agree.
Just then a messenger arrives from Ireland, telling of a rebel uprising there. York sarcastically suggests they send Somerset as regent since he had such good fortune in France. The two men bicker; Beaufort tells York to go to Ireland as regent, leading soldiers there to restore peace. York agrees to go, and he asks for an army to be readied soon. Everyone else departs. York says it is time to be resolved in his future course. His mind has been too busy imagining ways to bring down his enemies, but now he can act. What he lacked was an army, but now he has been given one. When he is in Ireland, he will leave someone in England to stir up trouble, he plans. Toward this end he has employed Jack Cade, a fierce commoner, who will pretend to be the now-dead John Mortimer, claimant to the throne. With Cade's help, York will discover the tempers of the common people and what they think of the Yorkist claim to the throne. If Cade is captured and tortured, he won't reveal his link to York, but if he thrives, then York will come back from Ireland with his army to seize the throne.
If Henry were a stronger leader, he would not be pushed around by his nobles and consent to the imprisonment of a man he believes to be innocent. Yet Henry can't resist the accusations of his nobles and his wife, and though he is distraught at the downfall of Gloucester, he allows him to be led off to prison. In fact, he believes he betrays Gloucester through his inability to act on his behalf. But he can't give commands; Suffolk arrests Gloucester, Beaufort orders him taken away, and the others all accuse him. And though the nobles agree that they have no real proof of wrongdoing, they agree he should be killed immediately, without a trial. The nobles play out their own version of mob rule, removing their enemies from office and killing them without reason.
Meanwhile, rebellions in Ireland provide York with an excellent opportunity. He now has an army and will be out of the country when he launches his first effort at the throne, through the destructive adventures of Jack Cade. Cade will rally the citizens behind an alleged Yorkist claimant to the throne; if he succeeds, York will finish the job, but if he fails, York will have to wait until another time. It is a clever plan, as it means York's claim to the throne will not be suspected, even while commoners rage over the countryside in the name of York.