Years before WW2 started it was generally assumed in many western societies that if there was another world war then gas would certainly be used. Anyone who saw that old 1936 Movie "Things to Come" will know that it predicted the use of gas in strategic bombing. Today we are so used to Movies & TV shows that depict a post apocalyptic world, I think that movie was the first do so. In fact many people in the 1930s thought that the devastation strategic bombing would cause would be as cataclysmic as we nowadays imagine the aftermath of a nuclear war.
Early in the War Churchill made a threat that if the Germans ever used gas then the UK would do the same, he further stated that the UK could more than match the Germans when it came to the Lethality of gases available. This second statement was actually a bit of a bluff. At that time Germany was actually ahead of the UK in chemical warfare development, they had already developed the first nerve agents in contrast most of the UK's chemical arsenal was little better than it had been in 1918.
Here another factor comes into play despite the often misleading statements with regard to German rearmament made in popular TV documentaries, the German economy did not get into full wartime production until quite late in the war. Also early in the war there was a lot of over confidence in the German Leadership, remember Goering saying early on if a bomb ever falls on Berlin you can call me Meyer. This meant that civil defence was not pushed as hard as it was in the UK where for example every citizen was issued with a gas mask which they had to carry with them at all time by law, there were even special gas mask/suits for babies
Images like the one above were in the public domain, so the Germans would have be aware of British preparations for a gas attack, while at the same time probably aware that they did not have the equivalent, at least not in the same numbers. Anyway the success of their Armies early in the war meant that the use of chemical weapons was not necessary, also given unpredictability of chemical weapons the can often be almost as much of a nuisance to your own forces as they can to an enemy.
By the time the Germans were perhaps getting desperate enough to us chemical weapons they were no longer on the offensive in the air, rather they were fighting hard just to protect their own airspace from a 24hour onslaught of allied bombers. Therefore in a situation to see who could dump more tons chemical nasties on the other in a single day, the numbers were no longer in their favour.