I agree and I pointed out to the man at the DfT strongly why pilots choose this route but he said that licensing was the CAA and the DfT was merely involved in this N reg bit.
Believe me I had my say after having spent many thousands of pounds putting my plane on the N Reg.
He said that he was responsible for the safe operation of planes in the UK and if they were on a different register and maintained to different rules they could not manage that.
I have to say that I agree with the logic but it doesnt half p**s me off that I have wasted money going on the N to get round ridiculous licensing laws when in reality our own CAA should look at why people are choosing to do it and fix the problem. I suppose that common sense approach is too much to ask for though??