We often get asked this. In fact there are a few small flocks of merino sheep here, mostly in East Anglia, but they are not the merino strain that produces the high quality fleece that is used for our gear. They, like most of the merinos in Europe, are bred for meat. The NZ Merino that's bred for wool in South Island New Zealand is a completely different strain.
What contributes most to the quality of the wool after genetics, is environment. In order to produce that amazing fleece, the sheep need dry conditions. Not only do they not like to get their feet wet, if the grazing is too lush it coarsens the fleece. The NZ Merino needs to work hard for its dinner! Rain is the killer for a high quality fleece. It waterlogs and damages the fleece, the sheep and the grazing.
Attempts have been made here in the UK to produce high quality fleece from merino sheep, but it's at the expense of animal welfare. To protect the fleece, the sheep have to be kept in barns - and for a free ranging animal like a sheep we think this amounts to animal cruelty. In addition, if the merino sheep hadn't over the generations been subject to intense cold and heat, they wouldn't have developed the fleece in the first place. It won't take many generations of keeping them indoors for the fleece quality to deteriorate.
Occasionally some cross-breeding is tried to produce a fine micron fleece, and if this were all there was to it, it could work. But it isn't. It isn't just the low micron count that makes superfine NZ merino so comfortable next to the skin, it's the nature of the scales on the wool fibres and their low profile. On top of this, in order to produce a high quality worsted spun yarn of the sort we need, the wool fibres have to have the right crimp (that's the curl), the right tensile strength, and the right staple (length). Only when all these factors are in the right balance do you have something to rival the NZ Merino for quality.
Sadly, quality will always be a problem with British wool as we no longer have a national wool testing authority on a par with those that exist in New Zealand and Australia, where they still take wool seriously. Various claims are made for various breeds now and again, but so far no proof has ever been given as to these claims. Until samples of the wool produced by these various cross-breeds are sent for independent analysis, and the results published, we advise that all such claims be taken with a pinch of salt. There is no such thing as an "English Merino".
The price of the wool bears this out. The most expensive UK wool is that of the Romney/Kent Cross at £1.46 per kilo (uncleaned greasy wool). Most other breed fleeces come in at well under a £ per kg. The NZ Merino costs a whacking £7.00 per kg (uncleaned greasy wool)! Which is why there's no such thing as "cheap merino", only fake merino, or poor quality wool from merino sheep bred for meat.