Re: Home office can revoke as much as it likes
> The German licensing department told me [....]
> When I came over in 2002 [....]
Did they tell you that fourteen years ago? Things have changed quite a bit since then.
> [....] that I needed to hand over my EU/UK driving license and I was automatically issued a German license to replace it.
That would be wrong, as UK licences are not valid for life (unless you pop it before 70, that is).
> If I travel back to the UK for a short period (less than 6 months), then I can use my German license.
And for longer than 6 months too.
> If I move back to the UK permanently, then I can apply for my UK license to be given back to me, in exchange for my German license.
You certainly can, but you don't have to, as long as your German licence remains valid (15 years from issue, or 2033, depending on when you got it).
> now that different countries can issue fines and points to license holders in different countries (and collect on them).
That is not the case, unless there is a bi-lateral agreement between individual countries. I know France and Belgium are working on that, but nothing has been signed so far. I am not aware of any such agreements, thought there might well be. In any event, that is currently outside of the scope of EU law.
Head over here to brush up on EU driving licence legislation: http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0126.