The problem with relying soley on microchipping is that there have been many postings discussing the movements of said chips. How many of those who are scanning think to check the dog's elbow or chest for a chip?

The other point is that there's still a tendency to see a dog running loose without a collar and automatically think "Stray". :( If someone finds the dog, it's easier to justify keeping it, because "no one cared enough to put a simple collar and tags on it." It's also quicker for someone to realize where the owner lives in case of emergency.
In Germany, France, & US, some areas do require proof of rabies vaccination to be kept on the dog in case of trouble. Don't know if UK does the same.
I also like having my dogs' collars on because I can unconciously keep track of where they are in the house. When they were younger, it was like having kids.... too quiet = trouble :D :D :D :D
toodles