On 28 May 1937, Neville Chamberlain replaced Stanley Baldwin as Prime Minister of Great Britain. Anglo-Soviet relations were not foremost on his foreign-policy agenda. Indeed, throughout 1937, the only diplomatic contact maintained with the Soviet government concerned its role in the Spanish Civil War. Furthermore, during the first eight months of 1938, the British government deliberately excluded the Soviet Union from talks held and decisions taken regarding the crisis in the Czechoslovakian Sudetenland. The reason for this lay in the prejudices of the British government and not in the military, financial and political constraints that were said to have existed and determined policy.
The new Prime Minister's first Cabinet consisted of Sir John Simon as Chancellor of the Exchequer, Leslie Hore-Belisha as Secretary of State for War, Duff Cooper as First Lord of the Admiralty, and Samuel Hoare as Secretary of State for Home Affairs. Anthony Eden remained Secretary of State for Foreign Affairs and was assisted by the Lord President of the Council, Lord Halifax. The foreign policy of the new government was twofold: 'limited liability' regarding Europe and the Far East, and determined appeasement of Germany and Italy. 1 Thus, in his 1937 report, the Minister for Co-ordination of Defence, Sir Thomas Inskip, laid down Britain's new strategic priorities: first, to protect the British Isles; second, to protect the trading routes that led to Britain; third, to safeguard the British empire; and fourth, to assist allies, but only in the last resort. 2 Consequently, the British government took no significant action regarding Japan's renewed war against China and maintained a policy of non-intervention concerning the escalating Spanish Civil War.
The Spanish Civil War had begun in July 1936 following the failed attempt at a coup d'état by the Nationalists, led by General Franco, against the elected Popular Front government. The British and French governments had declared a policy of non-intervention in August 1936, establishing the Non-Intervention Committee (NIC) a