IO540
Putting every UK-based N-reg GA plane onto G-reg would screw up a lot of experienced pilots who fly all over Europe, while raising a minuscule percentage extra money for the CAA.
I have never suggested that CAA revenue would be a driving force, that is your hang up.
I cannot answer your questions about the CAA's policy on various issues. However, they suggest that the N register used to avoid CAA requirements; N reg owners want to base and fly aircraft in the UK but they don't want to play by the UK's rules. However, DFC is correct when he points out that this not really an N register issue. It is the question of who should be the responsible authority for civil aviation in the UK. You also have to realise that flagging out could easily move to a less scrupulous register of convenience.
There appear to be two reasons why this issue may be getting more attention at the moment. The first is EC legislation soon to be enacted on the safety of third country aircraft using Community airports. This applies to large privately operated aircraft as well as commercial aircraft.
http://europa.eu.int/eur-lex/en/com/..._0664en01.pdf. The second is the possibility of an aircraft register in the Isle of Man
http://www.mbc.org.im/artman/publish/article_162.shtml