The Wool Board is not a draconian body with 'powers' over us. As I understand it, it was set up for the benefit of British wool producers needing to sell their product on a shrinking world market. Imagine if every single sheep farmer had to find their own market for their fleece crop. With the huge competition from Australia and NZ, which incidentally are much closer to the huge Chinese wool market so an obvious source for them, Britain no longer gets much of a look-in. Most of our wool used to go for carpets, but few people want wool now, or even carpets. British wool used to be highly desirable in places such as Italy, for bouncy mattresses. In Britain we have a wide variety of sheep and fleece types, little of it very fine, so for suiting and other clothing it's not all that sought-after, since the popularity of manmade fibres for clothes. Changed times from centuries ago when British wool was top of the market, to the extent that there was a roaring trade in wool smuggling.
The purpose of the Wool Board is to have our crop out there on the world market, and to get the best price possible for the producer.
Total production of fleece in Britain, especially of a particular breed or quality, is relatively small, so it helps the Wool Board to have everyone's clip going to them. Small crops of odd breed wool are just a nuisance, so they're not bothered what smallholders do with their clip, and the exemption is there to cater for small producers to seek a local market.
We didn't register with the Wool Board until we wanted to enter fleece into shows, as you need a membership number to take part. They do have some useful information on wool production and are happy to supply craft workers with small quantities of fleece.