They haven't given anything. We've moved from a government of looney idealogues to a government of insecurity. Labours' actions can be pretty well understood as a need to be taken seriously by the Very Serious People, be that finance, big tech or the security services.

Always always always assume stupidity over villany.

There's really no need to be conspiratorial about this. Law enforcement has always had a way of reading your communications, and the Uk government believes that shouldn't stop because e2e is becoming the default. Nobody is blackmailing them.