They need to do something with 18 and 18R. It's pretty silly that the UK is one of the very few free countries that still uses an X certificate for mainstream adult movies, and the internet has made 18R surplus to requirements.
What I would do is abolish 18R, and have 18 as a porn-only category, which would then require a new category for the most violent/sexual non-porn movies, so something like a 16 rating, though it's worth remembering that there isn't a scrap of evidence that violent movies make teenagers violent so I wouldn't have a problem with 15 being the highest non-porn category (maybe they could have a 15A and 15R).
Regarding the criminal law, it's pretty unacceptable in this day and age that a quango is required to make subjective judgments on what may or may not be illegal. They should only be permitted to rate a film, and if is content violates the law, then it should be for a court to decide (obviously nonsense like the Obscene Publications Act should be repealed, but I doubt anyone in their right mind thinks that shouldn't happen).