It's not going to be enforced that way even if that's what the text says. Although it might get spicy if one of the megacorps decides the legal risk is real and withdraws from the UK market.
Honestly, it kind of needs to happen properly, otherwise people will never learn. Allowing these half baked pieces of legislation to pass and then not implementing them except for some edge case allows the idiots who write it and promote it to claim they were right all along.
And this is a silly law. Everyone will break it, every time they use an encrypted communication, which is pretty-much every single thing one does on the internet these days. It's a perfect recipe for the authorities to let everyone carry on as normal, then when they want to crush someone they're certain to find some law that they have broken like this one.
We should be throwing out such laws.
The will get a prosecution after catching red-handed a mass murdering terrorist or a pedo with kids locked in their basement because they did an online shop which "used encryption". The authors will claim victory, without these protections we couldnt lock these people up, the Sun and the Mail readers will lap it up. 5 counts of murder and 1 count of doing an online tesco shop.
Remember that Al Capone was jailed for tax evasion.
Carlinhos: so I want you do vote in favor of [law X, which toughened restrictions on the kind of gambling Carlinhos promoted]
Demóstenes (naively): but, professor, that will make things harder for you, won't it?
Carlinhos: oh, don't worry, it's not going to be used against me.
Has anyone checked if the legislation has the special clause for "prosecutions require permission from the Attorney General"? (i.e. politically motivated prosecutions only - this has been seen before)