But if Iran controls the strait of Hormuz and keeps British ships from going through it, there is jack and shit Britain can do about it. Even without that control, there still jack and shit Britain can do about it without sacrificing control of India to take on this far more powerful Persia.
Commissar
At this point Britain is virtually unbeatable if angered enough. Iran, even with reforms is still largely an agricultural state with no modern industry. As such it can't block the straits and its coastline will be vulnerable to attack. Also India is important to Britain both economically and in terms of prestige and it won't give it up easily. Not to mention a powerful Shia Iran is likely to mean potential allies in both India [Hindu, Sikh and Sunni] and the ME [Sunni].
Steve