Can the CAA not say that National Licences will allow pilot
privileges on EASA aircraft in UK Airspace only?
No. An EASA aircraft (i.e. non-Annex-II) requires an EASA Part-FCL licence.
It is a question of politics and no-one in EASA will admit the best solution for light GA is an FAA style IR. Even your CB IR will be more expensive to obtain and maintain.
Why will the CBM-IR will be more expensive to obtain and maintain than an "FAA style IR"?
There are probably four factors:
1) The higher cost of aircraft operation in the EU
2) The requirement for ATOs to be approved, hence passing on the fixed costs
3) The requirement for an annual proficiency check
4) The greater theoretical knowledge content, even though it's 50% of what it was for the JAR-FCL IR
Factor 1 is just a fact of European life. It's never going to be as cheap to fly in the EU as in the UA. Enjoy the free/cheap healthcare though.
Factor 2 is a consequence of the EASA system, which appears to equate "approval" and "certification" with safety. It will affect all training, including, if it were retained, training for a future IMC rating if is to be applicable on EASA aircraft. For the CBM-IR, only 10 of the 40 hours need to be at an ATO, which should help with costs.
Factor 3 makes the IR a bit more expensive. I don't see much difference between a prof check and a BFR which the FAA pilot is going to be doing anyway. The IMC rating has a biennial renewal, which isn't much different.
The cost and convenience difference of factor 4 is probably more dependent on the mechanism by which the theoretical knowledge training and testing is delivered than the amount of stuff in the syllabus. The FAA IR has a single exam and the preparation is a single book, but covers much of the same ground.
The UK solution to the original gold-plated IR was to create a rating for PPLs (and included in the CPL) requiring 15 instead of 40 hours, slashing the ICAO standard for IFR privileges. The safety record of the IMC rating speaks volumes about the appropriateness of that hours requirement, but I fear that another one of EASA's flawed assumptions is that ICAO's word is sacrosanct, even if activities are confined to the EU. I'd like to see the IMC rating be offered (for use in UK airspace) alongside the CBM-IR and EIR.
So the key factors to attack are the requirement for ATO approval and the ICAO Annex 1 hours requirements (which might be replaced by something a bit more competence-based). The requirements affect a lot more than just the IR. PPL/IR Europe, IAOPA-EUR and Europe Air Sports are working hard to address those and other issues with EASA and the Commission.