This echos the former US laws on encryption, which prohibited the export of encryption technology, as ITAR classified it as a "munition". This led to stupidities like being legally allowed to walk around or leave the country in a T-shirt with a line of encryption code written on it, but placing the same line of code in a file and making the file available publicly was considered to be a weapons charge.
The US eventually moved responsibility for encryption to the State Department, and created a two-tiered system, with it being legal to export "weak" encryption (except to specifically designated "terrorist" countries), but not "strong" encryption. The breakpoint was 56-bit-key equivalent, 64 bit encryption. It was widely understood at the time that the NSA had the resources to decrypt 64 bit encryption "quickly enough"; one must assume that decryption has gotten even faster since then.
It is widely understood that no modern country can get away with banning encryption of business transactions. It is also well understood that each person has a substantial interest in the security and confidentiality of medical records and the exchange thereof -- but wealth is more likely to flee the country in the first case than people are likely to go on a general strike to protect their medical records.
DVDs and Bluetooth are encrypted, and Hollywood would have strong objections to being forced to release without encryption or DRM (Digital Rights Management). Apple and kin would probably threaten to withdraw itunes from the UK market.
But you can predict that somehow the law would be written to protect "business communications". And trust the bad guys to respect that crime is not a "business communication".
Do I detect a forthcoming proposal of requirement to register one's encryption keys with the government instead of outright ban on encryption?