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The European fishing policy is causing outrage in Flatby-on-the-Bog. When deputy mayor Laura Fitzgerald discovers that, owing to the occasional submergence of the Flatby peninsula, Flatby has never been formally ratified as part of the British mainland, she sets out to convince her fellow councillors to declare the town an independent state.

Whitehall sends in the local Member of Parliament as Flatby's campaign for independence gathers steam. Bullying MP Bill Jarvis offers Mayor Winston an OBE to back down on the crusade. Laura is furious when she discovers Winston is planning to do a deal. She knows he has a vicious temper and primes the locals to provoke him to reveal all.

Radio Free Flatby is launched. Meanwhile, Whitehall's representative is on mission to stir up unrest in the newly created Independent State.

There is a power cut – another underhand Whitehall method of trying to bring the citizens to heel…

Flatby celebrates its Court victory with a street party. A wealthy businessman seems the answer to prayers when hospital funds are cut by Whitehall.

Malcolm struggles with his conscience when he is made Chief of Police, and an embassy for Simon is set up over the butcher's shop.

The Independent State of Flatby is on a collision course with the UK Government by it buys liquor from the European continent and sells it cheap. A Customs post is set up. Unexpected invasion....