No British shipbuilder had experience of constructing submarines, so the admiralty began negotiations with the Holland Torpedo Boat Company and Vickers Ltd, which was a major shipbuilder for the admiralty. It was agreed that The Electric Boat Company (having purchased the rights from Holland) would licence Vickers to build submarines in Britain and an order was placed for five. The board of admiralty now considered that the submarines might also be useful in an offensive role, not merely to practice defence, and if trials of the boats were successful further orders would be placed with Vickers.

A general election in November 1900 led to a change of first Lord of the admiralty from George Goschen to the Earl of Selborne. The new Parliamentary Secretary to the board was Hugh Oakley Arnold-Forster, who as a backbench Member of Parliament had criticised Goschen for failing to adopt submarines. Now he discovered that the admiralty had been doing so in secret. Selborne became concerned that even so the admiralty was lagging some way behind the French in development and the first boat, whose contract was finally signed December 1900, would not be delivered until October 1901. Arnold-Forster proposed involving other companies in constructing submarines, but this was opposed by the second Sea lord, Vice Admiral Archibald Douglass, as well as by Wilson, on the grounds that it remained unwise to encouarage the general development of the submarine, which might be of more benefit to smaller navies rather than the RN. Wilson considered that the limited range of existing submarines meant they would only be able to operate in French waters, whereas if further developed could become a weapon to threaten British home ports. He recognised the potential of the submarine to prevent maritime trade, which was essential to the survival of an island nation like Britain. Any steps possible to slow down submarine development should be taken while the navy worked on means of defence against the submarine.

In the event the story that Vickers were building submarines was leaked by a Glasgow newspaper in February, and confirmed by the Admiralty in March. Arnold Forster continued to press for more submarines to be built, considering that the navy either needed a great many or none, but although Selborne was inclined to agree, the two were opposed by the Sea Lords. It was agreed that only three per year would be ordered which was the minimum number needed for Vickers to continue their specialist construction team. It was known that the French design was technically superior to the Holland boats ordered, but the admiralty had no better design available at that time.

Further development

Construction of the boats took longer than anticipated, with the first only ready for a diving trial at sea on 6 April 1902. Although the design had been purchased entire from the US company, the actual design used, Fulton, was an untested improved version of the original Holland design using a new 180hp petrol engine.

The admiralty decided to appoint an Inspecting Captain of Submarines to oversee development work and Captain Reginald Bacon was appointed in May 1901. Bacon was a technically minded officer experienced with the use of surface torpedo boats. His first recommendations were to note that the Holland submarines were likely to compare poorly to the current French design and would be unable to operate on the surface in anything other than fair weather (the boats had a range of only 20 miles underwater). He therefore suggested the designs of boats four and five which had not yet been started should be modified to improve their seaworthiness. The admiralty felt the Holland company would refuse any responsibility for difficulties arising from unathorised design changes, but agreed to order one submarine of a new design, the A1 

Experiments were conducted in 1901 at the torpedo school attempting to blow up a torpedo with underwater charges. In November 1902 Holland 1 finally became available for testing and was used as target with live explosive charges. It was found that the boat came to no harm from a 200lb gun cotton charge exploded at a distance of 80 yards. Since there was no known way of locating a submarine even to this accuracy, it was concluded that it was effectively impossible to attack submerged submarines. Destroyers were more at risk themselves from their own experimental charges thrown off the stern but in any case were not big enough to carry more than two charges. However, Bacon was much more optimistic over the offensive capabilities of the submarine, concluding that a group of 3-5 would be an insurmountable obstacle for any enemy ships attempting to operate near a port where the submarines were based.

Service

The submarines initially had serious reliability problems and a 1903 attempt to sail around the Isle of Wight on the surface resulted in four of the boats breaking down before covering much more than four miles (6 km).

The Holland-class were mostly used for testing but in October 1905 after a Russian fleet had mistakenly sunk a number of British fishing vessels in the Dogger Bank incident the Holland boats left harbour to attack the fleet. They were recalled before any engagement could take place.