As has been mentioned, there was no need for Britain & Germany to be rivals until the very end of the 19th century.
Until then they (And Prussia beforehand) more often than not shared common potential enemies in France and Russia. Prussia was forced into its alliance with Napoleonic France until breaking free to join Britain in the 6th Coalition. I assume the same was also true of other German states.
Previous posters have made some good points. After finally abandoning attempts to regain territory in France in the 16th century Britain had little interest in the continent beyond maintaining a balance of power and preventing any single country (Alternately Spain, France, Russia & finally Germany) from dominating the area.
And in earlier years the German states, busy in continental wars and undergoing unification, didn't have the ability to get involved in the race for colonies or the need to embark on a big naval programme.
However, I would disagree with Rzecz on his first point:- "Germany aspired for a Empire abroad, but Britain would have nothing of it."
I've just read Robert K. Massie's 'Dreadnought - Britain, Germany And The Coming Of The Great War.' I highly recommend this book to anyone interested in the subject.
As Reaver has mentioned, Britain had no problem with Germany seeking some colonies and when relations were still good there was talk of German trade routes being protected by the Royal Navy.
Britain was very keen to keep good relations with Germany and saw it once again as a natural ally against France and to a smaller degree Russia. However, rather than enter into agreement Germany kept pushing for more and more demands in return for its goodwill.
This did not deter Britain, and it was prepared to give Germany a lot of leeway in order to secure its favour. Only when the German Navy Laws came along did relations start to sour, and this was long before the Morocco incident.
A natural balance for the two countries at the turn of the 20th Century is a strong Royal Navy and a strong German Army. That way both countries are safe from one another, can do little damage to each other and can both bring something to an alliance between the two.
This balance was threatened by the German naval building programme - specifically designed to fight the RN. The UK could not allow a hostile (As it was by then) power to have superiority on land and sea.
Many many attempts were made to negotiate a settlement but the German government, supported by the Kaiser, would have none of it.
When you read about it in detail the stupidity behind the German policy is staggering. They could have had it all! Britain was almost desperate for an alliance and they pissed it away.
If European tensions had continued it could so easily have been Britain, Germany, Turkey & Austra-Hungary vs France, Russia & Serbia and no US involvement - with the former winning comparatively easily (Compared to WW1).
That means no Hitler, a much easier defeat of Japan and probably no Cold war.
But that's a story for another day...
