King Henry VIII enters, with Cardinal Wolsey and Sir Thomas Lovell. The king ascends to his throne, thanks Wolsey for stopping the plots against him, and asks that Buckingham's estate manager be called in to speak. Just then, Queen Katharine enters with Norfolk and the Duke of Suffolk.
Katharine kneels before the king, intending to make a request. She says she has been asked to speak on behalf of the king's subjects, who are upset about the levying of new taxes. While the people complain mostly about Wolsey, the originator of the taxes, they speak, too, against the king, and she warns that rebellion threatens. The king says he has not heard about this tax, but the queen reminds him that whether he created it or not, he is held responsible for it.
The king asks for more information, and the queen explains that the tax is said to help pay for campaigns in France, which angers the people. The king says this tax displeases him. Wolsey claims he only set it up because the judges told him to, but he urges the king not to make changes just to please those who would say negative things. Wolsey says that what we do best is often viewed in the public eye as our worst act, and our worst works come to look like our best. But the king thinks the tax is too much, so he undoes it and orders released any who have been imprisoned for resisting payment. Wolsey tells his secretary to release the order but quietly instructs him to let it be known that the tax was reduced through the encouragement of Wolsey himself.
Buckingham's Surveyor, who ran Buckingham's estates, enters. Katharine says to the king that she thinks it is a pity that Buckingham is out of favor, and the king agrees, but he thinks that advantageous positions sometimes lead to corruption, even in the seemingly wonderful Buckingham. Wolsey orders the Surveyor to recount what he knows of Buckingham.
The Surveyor says that he heard Buckingham say he intended to arrange for the crown to fall to him should the king die without a male heir. Apparently, a friar had led him to believe that he could be in line to the throne, and Buckingham shared this information with his friends. Katharine notes that Buckingham fired the Surveyor because of complaints from the tenants; thus, the Surveyor's commentary may be an effort to get revenge on Buckingham. But the king urges the Surveyor to continue.
The Surveyor says Buckingham declared he would have Wolsey and Lovell killed if the king died and then gain the throne himself. Further, he quotes Buckingham speaking of the role his father played in Richard III's struggle for the throne. Where his father could have stabbed Richard III to death, but was restrained by loyalty, Buckingham intends to appear loyal yet kill the king. The king now believes Buckingham is a traitor who intends to assassinate him. The king calls for a trial.
Katharine's request to eliminate the new tax shows more harmony between the upper and lower classes than is usually present in Shakespeare. The queen wants Henry to be more generous and to not make the people pay for the campaigns in France. She doesn't ask merely out of a soft heart but because she has wisely foreseen unrest and rebellion in the people if otherwise. The king shows himself to be an inattentive leader, yet one who is content to seem generous in reducing taxes–though his actions are really reducing the more serious danger of revolution.
This scene shows that Wolsey has taken over some of the king's authority, as Buckingham charged in the previous scene, by creating a tax without consulting the king. Wolsey's underhandedness is first proven in his own words when he tells his secretary to let the people believe the tax was reduced due to Wolsey's own effort. Then, he introduces Buckingham's former employee, the Surveyor, a man who clearly has a grudge, to speak against Buckingham. Despite the queen's astute observations about the Surveyor's intentions, no one listens to her.
The reference to Richard III refers to Shakespeare's earlier play by that name, where Buckingham's father, also the Duke of Buckingham, was Richard's right hand man in his bloody struggle for the throne. After helping Richard dispatch several royal family members who preceded Richard in line to the throne, the elder Buckingham began to doubt Richard. When Richard got the throne, Buckingham asked for lands that Richard had promised him, but Richard, seeing Buckingham's doubt, executed him. The Surveyor suggests that the younger Buckingham would himself reverse this situation–rather than being punished for being loyal like his father, the younger Buckingham would rather strike first, using the pretense of loyalty to get to the king.
The queen twice shows herself to be the most generous, kind, and wise person in the scene, first asking for the people's tax to be reduced and second by noting that the Surveyor is not giving impartial evidence. All the evidence we have on her so far is of a generous person, seemingly more aware of the dangerous intentions of others than even is the king. Yet she will be the next to fall.