- Britain faced three key problems in relation to imperial defence.
- Severe economic difficulties during inter-war years with key industries lost out in international markets because of Great Depression. Costs of defending Empire became a burden.
- New aggressive regimes emerged in 1930s in Europe and Asia, posing direct threat to Empire and potentially Britain herself. Imperial Japan seen as threat in Asia, Fascist Italy in Africa (where attempted conquest of Abyssinia in 1935 posed threat to British interests) in Egypt and Nazi Germany in Europe.
- Rise of nationalist independence movements, especially in India, made need for military resources in case of trouble more urgent.
- Britain had to take geopolitical view and prioritise – balancing costs and military demands of defending global empire against needs in Europe and home. In 1920s and early 1930s, mistaken faith that League of Nations could provide security in international affairs that British needed.
- Policy of appeasement adopted in some parts of world in order to allow deployment of resources to other areas. Meant seeking to diffuse tensions with Nazi Germany and Fascist Italy by allowing them to get much of what they wanted in terms of territorial demands in Europe, allowing British forces to be strengthened against possible attack on Empire in Asia from Japan.
- Britain modernised Indian army and continued with longstanding project to build up Singapore as formidable naval base, spending £25 million.
However, Neville Chamberlain (British Prime Minister, 1937-40) badly underestimated scale of ambition in Nazi Germany and Fascist Italy. Britain eventually went to war with Germany over Poland in 1939 and with Japan over Singapore in 1942.