When Bernard is talking to Jim Hacker about checking official permission to enter number 10 Downing Street, he mentions that it is a "tradition more honored in the breach than the observance", explaining that it is from Shakespeare. He is, in fact, quoting Hamlet talking to Horatio in Act 1, Scene 4.
Jim Hacker uses the phrase "Watch my lips" when trying to explain his point to Bernard. The first public use of this expression is usually credited to ex-President George Bush in his 1988 speech to the Republican National Convention, but this episode predates it by two years.
Introduction of Humphrey's nemesis, Dorothy Wainwright.