The wheel arches are there to ensure that pedestrians are not exposed to contact with the moving wheel, the arches also catch loose stones etc. A traffic officer would have good reason to issue a fixed notice.
Do you mean a Fixed Penalty Notice? I doubt it, illegal wheels like that are more likely to get PG9'ed and the car would be taken off the road. And in terms of the reasons behind the law on wheels and body work, it's actually more to do with catching and deflecting spray in wet conditions than pedestrian safety. If you're close enough for a wheel to clip you - its the wing mirror you need to worry about!! You're allowed to run open wheeled hot-rods and similar, provided it's not raining!
@ WhiteGTI - It's been illegal for years and is often a cause of much aggro for fans of Euro styling
