Where does it end?
A few of the comments have already pointed out that hammers are used to break into houses (cars, vans, etc...) or may be used to bludgeon a person to death. Likewise, screwdrivers, chisels, planes and even spirit levels can cause significant damage if used inapropriately.
If I was walking home from B&Q with a new hammer and the police happened to stop me, I would expect them to at least ask me why I was walking through a residential area with a hammer but I wouldn't expect to be arrested for it. However if I was walking home with my laptop strung over my shoulder I would be rightly annoyed if I was stopped and questioned by the police.
As it happens, my laptop runs Linux and understandably so has an arsenal of security tools installed. They are essential to the course I am undertaking at University, which incidently is Computing Forensics and Network Security, under this new proposal, I guess it would then become fair game for me to be arrested for simply walking down the street carrying my laptop. After all, who is to say that my laptop isn't running in with the wireless enabled in monitor mode effecting a type of `war-driving'?...
On my systems, I must have half a dozen different versions of each `security' tool available for Linux, to say nothing of the number of Live disks I own, half of which are designed solely for the purpose of computing forensics and carry tools which are not always shipped with standard Linux distros. On top of this, I do a great deal of programming so have development libraries such as Crypt++ and pcap as well as languages such as PERL and Python installed on my system(s). Theoretically libraries and languages such as these can be used to write `hacking' sofware. Does this mean that I can be arrested for `intent to develop software for the purpose of carrying out malicious attacks against remote systems'?
There is a very fine line between what is classed as legal and illegal use of any tool no matter what trade you are in. As I walk home with my hammer, my intent is to get home and use it to drive nails in to wood for a new partitioning wall. However the police may percieve my intent as being that of breaking into that brand spanking new Mercedes Benz parked 300 yards up the road.
The keyword here is perception. The government sees network security tools as being a threat to the security of systems whether their own, commercial or personal. Crackers see security tools as a means to breaking into systems which they have no right to access, the average user doesn't even understand (or care) what these tools really are so will probably vote with the government regardless of which party proposed the bill and as for the rest of us, well I guess that makes us outlaws then.
The question is, with this bill in place, does that mean the government is going to imprison its own IT department? Or shut down MI5? Because I bet they use these tools every single day!