Yes it does entitle you to drive anywhere in the EU - providing you are still as resident of the UK.
But if you become a full time resident of Spain you should have a Spanish issued EU Driving Licence
Sorry, but this is completely wrong. Under the EU Directive on Driving Licences, a UK driving Licence ( or any other EU country for that matter) is valid for use throughout the EU ( including Spain). If you become a resident of Spain, you do NOT need to change it for a Spanish one, (providing it is still valid)
If you believe this is wrong, then you need to post a link to the EU directive which confirms this change (which would be in contravention of everything the EU is currently working towards i.e freedom of movement). The latest directive which comes into force in 2013, is designed to provide more harmonization , not LESS.
Directive 2006/126/EEC of 20 December 2006 will replace directive 91/439 19 January 2013.
The new rules introduced by directive 2006/126/EC will reduce possibilities of fraud, guarantee a true freedom of movement for EU drivers and reinforce safety on European roads.