Would grants for merchant ships and more cruisers or destroyers have preserved Britain's ability to build capital ships?
Short answerOnly partly; the decisive constraints were specialist armor plate and heavy-turret production, which needed their own continuing orders or stockpiles.
NotesArmor manufacture and turret construction were the two main barriers to rapidly expanding battleship production. More destroyer or merchant work could preserve shipyard skills without necessarily maintaining those specialist supply chains. Ordering and stockpiling armor, experimental turrets, and machinery in separate locations could preserve capacity while staying short of assembling treaty-breaking hulls. HMS Dreadnought demonstrates how quickly construction can proceed once the critical material is already available.