I'm sorry but I have to say this doesn't work very well.
In the first place, the only target is shipowners, and only those venturing in certain regions. The great bulk of the country's wealth is landbound.
In the second place, only those "generals" who control warships can get anything this way. That is not a recipe for unity among them.
In the third place, it would be rather strange for warships of the state to be continually ordered off on escort duty (for years at a time) in all directions and with no regard for strategy. The Lord High Admiral is going to be annoyed.
In the fourth place, the escorts cannot guarantee protection. The merchants would be better off arming their own ships.
In the fifth place, this is really nothing more than defensive naval mercenaries. Which AFAIK have never existed. They always cost more than they were worth, or no one even thought to organize them. The only possible "racket" here is if the "general" sends a warship which costs 1,000 pounds a month to operate, to serve as an escort for 500 pounds a month. In which case he's robbing the state, and the Lord Protector is going to be annoyed.
iSTM that the de facto constitution of Protectorate Britain needs more working out. Who are the Generals, and what powers do they have?
"They" command "the army"? As with the One Ring, that's not possible. Individual generals command various parts of the army. Are these parts personal followings? Who controls the state apparatus in various parts of the country? Who can collect taxes or make confiscations? Who can arrest or punish the contumacious or reluctant?
If Oliver II is Augustus, and the NMA are the Legions, then Roman-style civil wars are inevitable.
Hmm... I was under the impression that in this period with the rise of piracy RN ships were used to patrol merchant shipping in a similar capacity as it has today. Maybe I was being a little over ambitious on that idea.
Doesn't matter, that can easily be removed without too much trouble. Thank you for bringing this up, the lack of comments has meant I've just been ploughing forward assuming everything is in order. I need people to comment and bring up the things I've missed, haven't detailed enough.
The Generals are those in charge of the New Model Army. As stated in Chapter 5, rule of law is kept in the same for of the Major-Generals, as seen in both TTL and OTL. Basically the country was divided into 11 regions (the organisation may be slightly different this time) with 1 Major-General per region, supported by Deputies as necessary. Obvious the army is divided amongst the Major-Generals maintaining control of the country, plus probably a few other Generals who do not have a regional control, but are still in command of forces (IE, those Scotland under General Monck, those coming back from the Spanish Netherlands and those being sent off to Portugal). I would expect that each section of the army would vary, some would answer directly to their commander (whatever his loyalties were, at this point given his survival more likely to be Pro-Lord Protector), others would be less so following more in the ideal of the Protectorate. Given the more Republican commanders of the New Model Army are probably either dead or imprisoned, most of the Generals now in command will be very supportive of the Lord Protector.
The rule of law is kept in each region by the Major-Generals and as such they have a sort of autonomy over their own affairs. They collect tax, can lawfully (or unlawfully) imprison individuals as necessary. Given that the loudest critics of the regime have been beaten, those who oppose it are keeping quiet, for now. As rule people are allowed to conduct their affairs as before, as long as they don't get on the wrong side of the NMA. Yes, there will likely be infighting eventually as some of the more ambitious generals vie for power, but thats down the road yet. Spain and the Dutch are keeping the Protectorate united for now against a common enemy.
That, and the fact General Monck is big supporter along with Charles Fleetwood. They are 2 big names in the army, and have the respect and support of many of their fellows. Both were close to Oliver I and would pledge support to a strong Oliver II. Several purges have taken place during Oliver I and Oliver IIs time, so now those in charge of the army tend to follow the Lord Protector's way of thinking IE - Pro Military, Pro Lord Protector, Anti-Monarchy, Pro-Independent (Religious Independence, the movement sought to remove a centralised 'Church of England' from the state, with each priest allowed to administer the parish as they saw fit, allowing for different religious sects to preach freely as long as they weren't catholic). Since Monck was a good friend to Oliver I and is basically controlling Scotland, and Charles Fleetwood is Oliver II's Brother-in-Law, they provide the 2 major pillars supporting the regime. Few of the lesser Generals, at least for now, will feel emboldened to strike. But its only been a few years, a lot can happen in the lifetime of Oliver II.
The constitution hasn't changed from that used during the reign of Oliver I. Lord Protector is the head of state, is allowed to choose his own successor, controls his own second house with the Parliament now being stacked by the 'Lord Protector's Men' to ensure the country doesn't keep getting ground down into infighting like during the Commonwealth era. This is made a lot easier by many outspoken Republicans departing. Again, a lot will develop in the following years but I've tried to use OTL events as much as possible to cover the extension of the Protectorate's existence.