As a software developer, they really don't stand a chance of stopping end-to-end encryption. Tor, VPNs and most recently, WhatsApp are just a few examples where such freely available technologies make it very easy to use and implement to everyday people. Just as Chinese firewalls are widely circumvented by it's population, any law in this country would go down the same route, at this level I'd be completely against a law against encrypted communications.
Ignoring the above fact, I am definitely not in the same boat as many other "omg they can see what I'm doing online the world will end" fanatics. I don't understand this argument. Do people realize that every phone call, every step you take in the majority UK towns/cities and any drive that touches main roads/public transport journey and shop you visit you will be traceable via CCTV or other means. Has this had a negative effect on your life in the slightest? Not mine, except for perhaps the chance of being caught speeding has increased.
Why is it so different online? Most of the internet is a public space and should be treated as such. Obviously what you do on your completely private Facebook page (similar to what you do behind closed doors) is your choice, but I see no reason why communications between people there, or elsewhere, [again, ignoring the encryption facts above] shouldn't be subject to similar laws than private phone calls ALREADY have.
I don't have an issue with the government having the power to listen into my phone calls and I hold the same view with respect to my online behaviour.