This scene takes place in Richard’s court. It begins with Richard asking Aumerle about Henry’s exit and if tears were shed. Richard then notes how popular Henry is with the common people. Conversation then shifts to the war in Ireland, which Richard is funding by leasing out royal lands and imposing taxes. Richard learns that Gaunt is dying, and decides that he will use this to his advantage and seize more funds for the war.
Richard’s comment that Henry is popular with the people of England foreshadows Henry’s eventual and popularly supported rebellion. Richard’s war in Ireland, along with his seizure of Gaunt’s estate, are two key mistakes that will turn even his closest allies against him and push them towards Henry.