THIS NEWSPAPER'S VIEW that Britain benefits from having a powerful, globalised capital has long been controversial, especially outside the city. “What is to be the fate of the great wen [boil] of all? The monster called, by the silly coxcombs of the press, ‘the metropolis of the empire'?” asked William Cobbett in his “Rural Rides” of 1830.

The belief that London is a source of corruption is one reason for wanting to constrain its growth. The city's dominance is another. “It is no good state of a body to have a fat head, thin guts and lean members,” wrote Thomas Roe in 1641. The Royal Commission on the Distribution of the Industrial Population, whose 1940 report formed the basis of the post-war decentralisation policies that helped tip London into a half-century of decline, took a similar view: “The attraction to the Metropolis of the best industrial, financial, commercial and general ability” represented “a serious drain on the rest of the country”—though, as Stephen Inwood points out in his excellent book, “A History of London”, “it was unable to offer evidence that London's industry had grown at the expense of other regions.”

The misapprehension that lay behind those decentralisation policies—that there is a fixed amount of economic activity in the country that can be shunted around without affecting its level—has proved persistent. It is evident in the decision to ship parts of the BBC from London to Salford, in north-west England. The BBC has benefited from being part of the broadcasting cluster in London, and that cluster in turn benefits from the BBC's presence. Both will suffer from the move, though the BBC will probably feel it more. One of the bits to be shunted north was its breakfast show, which lost its best presenter as a result and struggles to persuade celebrities to trek up to Salford.

But the greatest danger comes from policies directed against various bêtes noires which are overrepresented in London. Three groups of people are particularly unpopular in Britain at the moment—rich people, bankers and immigrants. Since London depends on them for its prosperity, policies aimed at making life harder for them will hit the capital.

The tax system has become somewhat less friendly to well-off people since the financial crisis. The top income-tax rate went up to 50% in 2010, and though it is due to come down again in April next year, the new rate will be 45%, not 40% as before. Taxes on the rich are pretty steep, for those who pay them (see chart 4). For non-doms the levy has made life more expensive and the taxman has got tougher on dual-contract arrangements, whereby employers pay non-doms partly in and partly outside Britain. The rich complain not just about the specifics of the tax regime but also about its uncertainty. Changes in top tax rates, non-dom levies and the like seem capricious. People with a lot of money like to plan, and uncertainty makes planning difficult. Nor do rich people feel properly appreciated. “I don't meet anybody today who genuinely believes that this country values wealth-creation,” says Apurv Bagri, the Indian-born president and CEO of Metdist, a metals-trading company, as well as deputy chairman of the London Business School and chairman of the Royal Parks. “The rhetoric in the UK is a bit like the India I left in the 1980s,” says V. Shankar of Standard Chartered bank. “You've forgotten Margaret Thatcher, and you're taking a leaf out of Indira Gandhi's book.”

The three groups of people who are particularly unpopular in Britain—the rich, bankers and immigrants—are those on whom London depends

Hostility to the banks is not surprising. They contributed to the economic crisis, and propping them up has cost many billions. The regulatory regime for them has tightened since the financial crisis, and more regulation is on its way from both Westminster and Brussels. The European Parliament, for instance, is proposing to introduce legislation to limit bankers' bonuses to 100% of basic salary. Bank bosses say this will make banks less efficient. They maintain that paying their employees through bonuses helps link pay to performance, reduces the cost of firing people and holds down their fixed costs.

Other financial-sector companies are also watching impending regulations warily. Tidjiane Thiam, the chief executive of Prudential, an insurance company, says the Solvency II European regulations for the insurance industry, due to be introduced in 2014, will hamper the company outside the EU, where the Pru makes 88% of its profits. If they are implemented in their current form, he says, “we'll have to leave London. This is not sabre-rattling.” The Pru employs only a few hundred people in London, but “the number of law firms, accountants and banks that would lose our business is enormous. We would be the first but by no means the last. It would be like a dam breaking.”

Attitudes to foreigners are hardening, too. Britons are now more hostile to immigration than people in any other wealthy country (see chart 5). This shapes policy and harms the economy. Getting a visa for Britain is more expensive and time-consuming than getting one for most rich countries. Britain is not a member of the Schengen accord, which allows visa-free travel throughout the EU. As a result, Chinese visitors—who will make up an ever-larger share of the global tourism business—often skip Britain altogether.

London, though, takes a warmer view of foreigners than does the rest of the country, and this is not just because migrants are naturally in favour of migration. Even British-born whites in London are friendlier towards migrants than those elsewhere in the country. But migration policy is not determined in London; and the government has promised to reduce net migration to “tens of thousands a year” by the next election, due in three years' time. Given that last year the figure was 252,000, this is a tall order. The government's main focus is on students. The number of colleges that can sponsor international students has been reduced, as has students' freedom to do paid work during and after their time at college. This will make studying in Britain unaffordable for many—thereby undermining an industry worth about £15 billion a year. Getting visas for professionals, too, is harder. Dena McCallum of Eden McCallum, a firm that hires freelance management consultants, says that in the past year her firm has had to turn away 15 consultants from America and Asia—people who used to work for firms like Bain and McKinsey and have postgraduate qualifications from Harvard, MIT and INSEAD—because they would not get visas. She is baffled. “Why would you not want ambitious, highly skilled, highly paid people to come to work and spend in this country?” Ms McCallum, an American, worries about London. “It used to have the feeling of being on the way up, but it's beginning to lose that buzz. You hear lots of stories about people moving to Switzerland and Asia.” There has been a trickle of departures, not all of them people in hedge funds. Bill Brandt, an American who worked for BP for 20 years, has moved to Arizona, where he works with the state university setting up clean-energy joint ventures. It was the non-dom levy that prompted him to leave: “It's a lot less expensive in the US, and a lot easier to be entrepreneurial. And in the UK you could just look ahead and say, it's going to get worse.” The danger is not just that companies and people will leave London, but also that companies will not grow there and new people will not come. Mr Bagri says that his family will go back to India, but “my going doesn't matter if there are people coming behind me. We've had 25 years of wealth creation. Have we got the people who are going to make the next 25 years happen?”

London still has a lot going for it—an efficient legal system, a clean polity, some brilliant schools and universities, clean air, beauty, fun and fairly safe streets. But it faces competition from Asia as capital accumulates there and the financial-services industry follows it. Singapore and Dubai, which already have far better infrastructure, are building the legal systems, regulators, schools and universities to attract the sorts of businesses and people that have made London prosperous.

Study "The Knowledge", our interactive guide to London's demography and economy

Britain depends on London's prosperity; but, as London has got richer, so its distance from its hinterland has grown. It has more foreigners, wealth, poverty, diversity, disruption and excitement than the rest of Britain or the European mainland. It is an adventurous, outward-looking place, tugging at its moorings between an inward-looking country and a troubled continent.

That is a problem for London, for it cannot shape its own future. The mayor has little power. The rules on financial services, tax and immigration, which matter so much to London, are set by the European Commission and the British government. Both are adopting measures which will do disproportionate damage to London. It is getting harder to run a financial-services company, to make money and, most worryingly, to get into Britain. This hardline immigration policy, fostered by tough economic times, will make it increasingly difficult for the city to go on reinventing itself in the way it has done over the past 25 years.

The maths of cities, as expounded by Geoffrey West, are not encouraging. They suggest that once the cycles of innovation that drive growth come to a halt, cities do not decline gently but collapse. Whether or not that happens to London will be determined in part by the economic and social forces that sweep uncontrollably across history, and in part by the voters of Britain and the bureaucrats of Brussels. They need to treat London with care, for the ecosystem of a city is a delicate thing. If it starts to decay, nobody will know until it is too late.