Why were their tank design so far behind and were they so obsessed w/defense that the blitzgrieg concept was never considered?
British military doctrine was firmly entrenched and unbroken for a long time within the british military tradition. The germans had to basically start over from scratch after the treaty of Versailles so was open to innovation and fresh ideas to get an edge over their opponents. They knew no matter what form the next war would have they were surrounded by enemies and could fight a war on 4 fronts possibly. They needed a way to defeat a larger army quickly and switch fronts to meet a new threat. Lightning war was a sure recipe.
And it wasnt just the british who gave them these ideas. The french army was also dabbling with the idea of massed armour penetration but thought it was too rash. The germans also trained with the russians and picked up some of their ideas as well.
As pointed out, its fallacious to think that the British were somehow doctrinally moribund or obsessed with defence. That fact that they had an entirely motorised army by the outbreak of the war is proof of that.
As to Fuller and Liddell-Hart, yes they had some good theories but these were just theories and they were mostly incomplete and did not match the actual implementation of 'blitzkreig'. What Guderian did was to take these ideas and use them to inform a workable plan for mobile armoured warfare.
British tank development was hampered by a number of factors including financial constraints in the 1930s - the army had a lower priority for funds than the navy or air force and out of those funds, only a fraction could be spent on armour - everything else was competing for these funds including all the soft-skinned vehicles, the new Bren guns, the new 25 pounders and absolutely everything else from uniforms to field kitchens. I dont have the exact figure to hand (see The Great Tank Scandal by Fletcher or Death By Design by Peter Beale) but out of total British defence spending, tanks accounted for something of the order of 1% or less. The Germans did not have such constraints as Hitler was simply throwing such vast and unsustainable amounts on money at the wermacht it was on the brink of bankrupting the country.
There are a couple of peculiarities to Britain than hampered tank design. Britain at the time was heavily reliant on rail transport and has a smaller loading gauge than the continent. This had two effects on tank design - firstly there were no readily available high-powered road engines suitable for a tank. The A12 Matilda II used two bus engined bolted together, for example. The second effect was that tanks couldnt be as large as on the continent because otherwise they couldnt be moved by rail. The Churchill had to have its radiator louvres removed and stowed on the hull before it could be moved by rail. Restricting the width of the tank restricted the size of the turrey ring which in turn meant smaller turrets mounting smaller guns.
The catastrophe in France in 1940 and the imminent threat of invasion meant the British were deprived of choice in tanks and tank design. They had to have tanks and they had to have them now, regardless of any deficiencies in the design. Hence another 700-odd A11's were built despite being obviously ineffective because 700 ineffective tanks are better than no tanks at all.
Similarly the Covenator, described by some as the worst tank ever produced, was rushed into production before its congenital defects were discovered. In peace time, the design would have simply been rejected before any orders were placed. In fact 1,700 of these were produced, not one of which saw action.
The Churchill was an extreme example - it was ordered straight off the drawing board and delivered straight to operational units with no testing. It is remarked that there was not a single protoype of this tank - there were in fact thousands of prototypes. Once the teething problems were ironed out though, the Churchill proved to be one of the best tanks of the war.
The standard British tank (and anti-tank) gun was the 2 pounder. Very effective in the early stages of the war but soon became obsolete. The replacement 6 pounder had been designed but production was delayed as instigating its production would mean a drop in 2 pounder production that was unacceptable given the demand for guns. Again, lots of bad guns is better than no guns at all when you are faced with an imminent existential crisis.
Other tanks were not so bad. The A12 Matilda was a very good design for the early war but impossible to upgrade and expensive to produce. The Crusader and Valentine were at least adequate and the later Cromwell and Comet designs were outright good designs.
Until quite late in the war, Britsh armour was rivitted not welded. Welding makes better armour (rivets can snap off and fly around inside the tank when hit) and has a substantial weight saving but again, the urgency for of tanks nowmeant it was judged uneconomic to instigate the new production techniques.
British armour did suffer from poor tactical doctrine though. At the beginning of the war, the doctrine was rather dashing and gung-ho cavalry in its implementation. Tanks were to fire on the move and charge down the enemy no matter the cost. This type of thing persisted for far longer than it should have done, in large measure because of the deficiencies of the 2 pounder gun which was virtually useless against anti-tank gun screens and increasingly out-ranged by the German tank guns. The British had little choice but to charge ahead and try and close to effective distance – an insanely courageous but very costly way to fight. Once the 6 pounder and American M3 and M4 tanks appeared with their 75mm guns, things changed quickly enough.