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You will still be prosecuted and the case will be referred to Court. The Court has the option to impose a fine and penalty points to a "shadow/ghost" licence which will be set up by the DVLA, or for serious offences, a ban can be imposed. In extreme cases, the Court can prevent you from driving until you have obtained a UK licence.
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Update-2: September 2012. Updated the instructions with screenshots.
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This means that new drivers, who under the New Driver Act face a driving ban if they accrue six penalty points in the first two years of their driving career, could find themselves banned after being caught just once. The rest of us will lose our driving licence if we reach 12 penalty points