Part of the weirdness of UK accounting in Global 1940 is that the historical flexibility of the UK economy was halfway between “London is the capital, if it falls you’re screwed” and “whatever; we can fight equally well using any of our colonies as a base of operations.”
Like, if the Axis had sacked Capetown, Sydney, Singapore, and Cairo, then the UK’s colonial empire would have ceased to generate any income at all for London, even if Calcutta and wide swaths of the African interior and Western Australia were still under British control. On the other hand, if the Axis had sacked Calcutta alone, with no other conquests, then the UK would have found some other regional capital, and everything would have hummed along with minimal disruption. Basically, the British Empire was in a position to absorb some shock, but too much shock would have brought it down.
I’m really not sure how to model this in terms of A&A gameplay. Losing an IC seems like too light of a penalty for losing a regional capital, but losing your income for an entire half of the board seems too heavy. One option would be to say that each time an Axis power captures Ottawa, Capetown, Cairo, Sydney, Singapore, or Calcutta, then it gets to loot 15 IPCs from the British treasury, or 25 IPCs for capturing London, but British income/production are otherwise unaffected. I like the UK Europe / UK Pacific divide as as way of speeding up the game, and with the new, more generous capital-sack rules, you don’t run into problems where London is Axis-occupied and so West India is somehow incapable of being administered at all even though Calcutta and Cairo are holding just fine.
The NOs as written already incentivize Britain to try to maintain the territorial integrity of regions like Australia, and you could tweak the NOs even further in that direction if you wanted to. Similarly, the 3 unit/turn cap on minor ICs help incentivize Britain to spread its purchases out across the globe, although with naval units, that cap is less important.
