Law:
Under Section 87 of the Road Traffic Act 1988 it is an offence for a person to drive on a road a motor vehicle of any class otherwise than in accordance with a licence authorising them to drive a motor vehicle of that class.
Simply put, if you do not have a licence to drive the vehicle you are stopped in, you are committing this offence.
The prosecution simply have to prove that you were driving the motor vehicle on the road. A defendant must prove that they had a valid licence.
Similarly it is also an offence to permit someone else to drive knowing that they also are not driving otherwise than in accordance with a licence.
Penalty:
This offence carries an obligatory endorsement of 3-6 points on your licence whereas disqualification is discretionary.
You will also receive a fine subject to the severity of the offence and taking your income into consideration. The maximum fine is £1,000.