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English Catholics were full of hope when James I made his way to London from Scotland in 1603. English Catholics believed that James had promised them an improved lifestyle once he had ascended the throne and all Catholics in England expected a more tolerant society.
If Catholics expected greater tolerance they were greatly let down. Before Elizabeth I died, it is thought that Everard Digby, one of the Gunpowder Plot conspirators, secretly travelled to Scotland on three separate occasions to get a promise of tolerance for Catholics in England from the then James VI. Digby returned to the north of England with good news for Catholics - in return for English Catholics giving their full support for his accession to the throne of England, James would introduce more toleration and, for example, prayer would become easier.
The reign of Elizabeth had forced Catholics into a corner. They had to be very secret in all that they did - especially the hiding of Jesuit priests. Catholic society had become very ordered - it had to be so in order to survive.
If English Catholics expected much from James, they were to be disappointed. It is said that the great anger that Digby felt pushed into the conspiracy that planned to kill James I.
In his writings while King of Scotland James frequently used the words “devil”, “Satan” and “demonic” when referring to the Roman Catholic Church and the Pope. It is highly unlikely that anyone in England would have read these works but if they had, they would have realised that any chance of tolerance for the Catholics was at best minimal.
James had inherited from Elizabeth her chief minister Robert Cecil. He was a staunch Protestant and viewed Catholics as being tantamount to traitors simply because their allegiance, from his point of view, was to Rome as opposed to the king. Cecil was intelligent enough to realise that James could not tolerate a rival especially because of his belief in the Divine Right of Kings. Cecil used every opportunity to infer to James that the popes were rivals to his authority in England and Scotland - something James could not tolerate.
However, English Catholics were very much on their own at the start of the reign in 1603. Spain, the most Catholic of Catholic states, was far too poor to threaten a nation that had devastated Spanish morale in 1588 - the defeat of the Spanish Armada. Another armada had been planned but the will was just not there. A further blow came in 1604 when Spain signed a peace treaty with England. For a short while, Philip III thought about asking for clauses to be put into the treaty that guaranteed rights for English Catholics. However, rather than antagonise the English and threaten the treaty, Philip decided against this. Henry IV of France, England's closest continental neighbour, was also not in a state to help English Catholics - even if Henry had wanted to. Therefore, English Catholics were very much alone which probably spurred on the 1605 Gunpowder Conspirators - if they had no one to help them out, they would resolve the issue themselves. Hence the plan to kill James I.
The Gunpowder Plot was a disaster for English Catholics as it immediately labelled them traitorous in the eyes of a king who had, so he believed, been saved by a miraculous intervention by God - as opposed to a letter being sent to Lord Monteagle, which led to the cellars of Parliament being searched and Guy Fawkes being found. Jesuit priests were blamed and much effort was made to find Father Henry Garnet and John Gerard. The former was caught and executed while the latter made his way in secrecy to the safety of mainland Europe.
Some believe that Robert Cecil somehow orchestrated the whole affair to turn James totally away from the notion of granting Catholics more freedoms. If Cecil did mastermind the plot, he did get from it what he wanted.
In 1606 a law was introduced which made all non-noble Catholics swear an oath that they rejected in totality the Rome-based ruling that any state leader excommunicated by the Pope could be forcibly removed from his/her throne by the people or murdered by the people without fear of punishment from God. The English law made it clear that the Pope's ruling was itself “damnable”. Those who refused to take the oath could be executed as some were. The law was condemned by Rome and this created a difficult environment for non-noble Catholics in England. If they took the oath, even under duress, they went against the Pope. If they did not take the oath, the full force of English law could be hurled at them - with the full support of a king who was mortified that some Catholics tried to kill him.
In the immediate aftermath of the Gunpowder Plot the position of Catholics in England became clear and it led to the majority of Catholic families simply withdrawing from society as a whole. This was probably the best action they could take.
Despite contemporary articles linking Fawkes, Robert Catesby, Everard Digby etc to the Devil, James made it publicly clear that he did not blame European Catholic states and viewed the issue as an internal one. The Catholic community did itself no harm by withdrawing into the social and political background as there was no immediate general campaign against them as might have been expected.