It's fairly simple: encrypted software developers will leave the UK, because no one would trust the security of their SW. I'm not sure if there is an exception for online banking, but perhaps this bill will stimulate the mattress industry and encourage return to the old ways of storing money.

Australia did something similar ages ago, just for absolutely every peace of software even if a aingle employee lives from their but this one targeting encryption is bad too, it basically means every encryption software developer will leave the UK and proper encryption will be illegal to use.

The issue is end to end encryption.

The law change requires messaging applications to be able to provide messages between people using their service.

In the 00's, messaging applications would have a secure connection between themselves and person A and anouther secure connection between themselves and Person B.

Person A would encrypt the message, send it to the service, who would decrypt it, open a connection to Person B, encrypt the message and send to Person B.

So if the police got a warrent for communications of Person B (say the police think the person is involved in human trafficking), then the messaging service could provide all messages sent to Person B.

Message services have taken themselves out of the loop, Person A now encrypts the message and sends directly to Person B. So the police appear with a warrent and the message service shrugs its shoulders since it hasno means to get the data.

The law effectively requires messaging services to design the apps/service so they can comply with a warrent.

The issue is less encryption and more the balance between your right to privacy and states right to intrude.

This is why banks aren't upset, they aren't talking about back dooring encryption and bank encryption is between you and the bank so they don't have to do/say anything.