How did Germany's rejection of the "proposals... for a naval holiday" likely shape or necessitate the subsequent actions Churchill describes, such as "the largest supplies till then ever voted by Parliament for the British Fleet" and the "complete revision of British naval war plans"?

From the book

4, 4. The splendid gift of the _Malaya_ by the Federated Malay States raised the figure of the first year from 4 to 5. In announcing these decisions to Parliament later in the same month I made publicly and definitely those proposals for a Naval Holiday which were fruitless so far as Britain and Germany were concerned, but the principle of which has since been adopted by the English-speaking peoples of the world:— ‘Take, as an instance of this proposition I am putting forward for general consideration, the year 1913. In that year, as I apprehend, Germany will build three…

she did not build would therefore automatically wipe out no fewer than five British potential super-Dreadnoughts. That is more than I expect they could hope to do in a brilliant naval action. As to the indirect results within a single year, they simply cannot be measured, not only between our two great brother nations, but to all the world. They are results immeasurable in their hope and brightness. This then is the position which we take up—that the Germans will be no gainers over us so far as naval power is concerned by any increases they may make, and no losers,…

er light cruiser (a “Blonde”), the usual flotilla of twenty destroyers and a number of submarines and ancillary craft. The Estimates embodying this policy had to be passed by the Cabinet at the latest by the end of February, and presented to the House of Commons in the utmost detail in March. But a great uncertainty hung over all these plans. A continued succession of rumours and reports from many sources, and of hints and allusions in the German Press, foreshadowed a further German naval increase. This, following upon all that had gone before and coming at a moment when relations…

. McKenna, for the resolute and courageous manner in which he fought his case and withstood his Party on this occasion. Little did I think, as this dispute proceeded, that when the next Cabinet crisis about the Navy arose our rôles would be reversed; and little did he think that the ships for which he contended so stoutly would eventually, when they arrived, be welcomed with open arms by me. Whatever differences might be entertained about the exact number of ships required in a particular year, the British nation in general became conscious of the undoubted fact that Germany proposed…

st Lord of the Admiralty, Mr. McKenna, suddenly demanded the construction of no less than six Dreadnought battleships. He based this claim on the rapid growth of the German Fleet and its expansion and acceleration under the new naval law of 1908, which was causing the Admiralty the greatest anxiety. I was still a sceptic about the danger of the European situation, and not convinced by the Admiralty case. In conjunction with the Chancellor of the Exchequer, I proceeded at once to canvas this scheme and to examine the reasons by which it was supported. The conclusions which we both…