You're obviously only talking about the UK, I presume, which allows flying G-reg on an FAA PPL VFR only ? Because if you fly into the US with a JAA license on a G-reg, you have complete freedom too, without ever having demonstrated knowledge of "their" air law. That is the whole point of ICAO and the Chicago convention: establish a common standard with minimum requirements for safe operation worldwide. Thats why ICAO regularly audits countries, so that licenses can't be "bought" from some corrupt official in Ulan Baatar or Gatwick.
And the rest of Europe isn't that generous at all : To convert, even at PPL VFR level, requires a wrist of exams (you got to love those questions on inner ear anatomy or the number of rods in the eye !) and a flight test, even for competent pilots with 100 hours of PIC time.
Not that it's wholly relevant, but for the record, Ireland is just as generous a the UK, automatically rendering an ICAO licence valid on EI reg aircraft.