"But I thought in VBCW he resigned from the government? I seem to remember that from the sourcebook?"
Churchill was out of government in 1938; no friend to either Baldwin or Chamberlain and unpopular in the Tory party at the time. I agree with Jim Hale, on balance, that he would be a royalist, but by the late thirties he was no fan of Mosley or fascism generally. He was more pro Spanish republic than people realise, for example. So still out of govt, perhaps leading the King's faction at court?