Cruisers and commerce protection
Da Pwnzlordd,
Keep in mind that during post-WWI and pre-WWII, the idea that subs would be the primary anti-commerce weapon was not taken seriously by the RN, or for that matter any other navy. Subs were too short-ranged, too limited in terms of attack options, and far too vulnerable to aggressive counter-attack by even light escorts. The convoy system was considered to be an excellent response to the submarine menace, and the development of ASDIC (we in the US call it SONAR) was thought to have 'solved' the u-boat problem.
With this in mind, the threats that naval planners were looking at (remember, they had the WWI experience fresh in their minds at the time) were primarily armed merchants and 'commerce raider' cruisers. These vessels could be prepositioned (prior to a declaration of war), and could cause significant disruption of commerce operations in time of war. This was certainly the 1914/early 1915 experience, particularly in the Pacific with Spee's squadron. The biggest problem was the lack of cruisers, vessels with enough armor and big guns to take on the raiders and sufficient range to patrol the vast spaces of the ocean trade routes. Absent radar and long range air patrols (both of which were still far in the future at the end of WWI), only cruisers could find, fix, and destroy enemy commerce raiders, or at least deter them.
Since the raiders themselves could choose the time and place that they would strike, a defending force would have to defend pretty much everywhere while the attacker would strike in only one location. Hence any defender would have to have a large number of cruisers to protect the commerce lanes. For the Brits (who had a world-wide empire that they were absolutely dependent upon for basic resources), this meant a large and power cruiser force was essential. Remember again that any British naval planner looking at the WWI experience would conclude that a future enemy would almost certainly decide to use commerce raiders against Britains large and exposed trade routes. Given that these potential enemies were NOT limited to Germany (Italy, for instance, had a very large cruiser force that would be well-suited to such activities, and the Japanese though not immediately a threat, certainly had the potential to become one), dispensing with a significant cruiser force would be an extremely poor choice.
Convoys, while useful, still would require significant naval assets for support beyond light escorts, as a under-armed convoy would simply make the attacker's job easier by gathering the targets into a easily attacked mass without sufficient defensive capacity (given the limited durability of subs, this was far less of a problem for ASW operations, but some under-armed convoys were successfully attacked in WWII). A well-armed, well-prepared convoy could stand off or even destory an attacker, but in order to generate these, a large cruiser force was necessary.
As a final point, note that at the beginning of WWII, the Germans did in fact do precisely what the Brits expected, i.e. use several cruisers and light capital vessels as commerce raiders. These foces were defeated primarily by the cruisers that the Brits had on station, backed-up by capital ships sent to hot-spots identified by the cruiser patrols. An excellent example of this was the Graf Spee (possibly the most ironic of ship names, considering her fate)....
I hope that this provides some perspective for the British need for a cruiser force.