Locked out of your own data...
What Cameron should be banning is the misuse of encryption, especially if it locks YOU out of legitimate access to YOUR data. I would fully support and welcome that. I could not care whether GCHQ reads my often very boring emails, indeed they may occasionally learn something useful from them, as a few things I discuss may have educational value to a very few people. They will not learn anything of extreme personal importance, it just doesn't go by email, as far as I am concerned. Sadly, many others don't appreciate the risks, yet. Joe public can't reasonably be expected to be a security expert, but education and publicity of the risks will help.
My main grumble about encryption is that with things like HDMI camcorders, the development of downstream processing, mixing and recording hardware and software is difficult or impossible, because the protocol is sewn up tight in NDAs and licence fees way beyond any FOSS developer. Allegedly this is so that the encryption (not needed on your own recordings, or mine, as it is the property of the people making the video and performing in it) demanded by the dreaded MPAA, M$ and various other nasty organisations is not compromised. Of course serious pirates just do a hardware bitwise copy of anything, encrypted or not, so the encryption is all pointless and only harms legitimate users. And yes I know that this is somewhat off topic, we are not discussing licensing and trade secrets as such here, but the underlying cause is an ill-informed obsession with encryption by the dinosaurs at the MPAA etc who have failed miserably to update their business models to work well in the internet age.
I would have to pay $10k to get a licence to access the HDMI protocol, just to make a simple gadget, important to a very niche market, maybe 100 worldwide, costing under £100. So, the entire revenue, manufacturing costs and design costs would be gobbled up, just to prop up encryption that should be illegal. And, some people can't get what they actually need, but don't yet know that they need, because they don't know what benefits it brings them. As things stand they never will, and I can't even make the one unit that I need for myself.
The UK, led by Cameron, has, if I recall correctly, recently relaxed copyright law to allow converting media to other formats, which of course has become necessary every time the standard format changes, VHS->DVD->BluRay, or LP/Cassette tape->CD etc. This was right and sensible, albeit rushed through just ahead of a contrary EU law, but in many cases we are prevented from doing exactly that, by a stupid, irrelevant and outdated obsession with encryption.
Then there is the somewhat serious risk of losing the encryption key, and all data, in cases where storage is encrypted. And, having lost your business data, going to jail because you can't give the key to the police to allow your data to be read. There has to be a better way. Hardware measures involving locks and keys, biometrics, etc, perhaps.
I would think that where data travels internationally (and sometimes it does, even between end points in the UK), there is a compelling need for encryption, as some countries (China, North Korea, US...) are entirely untrustworthy and can be relied on to steal both commercial and military information. But, within the UK, it may tip the balance unfairly towards the criminal element.
I (and no doubt countless others) have the technology to make the computer equivalent of the "one time pad", the only truly unbreakable (without physical access) method of encryption, as far as I am aware. I have abstained from trying to exploit it since 1992, because I feared the inevitable visit from two large gentlemen from an unspecified government agency which always follows the release of such things. I think it has become even less likely that it will ever be sold as a product, but there is nothing to prevent criminals creating the same type of thing and using it. How does Cameron propose to stop that? A seemingly random block of data sent through the internet may be legitimate binary data, or if labelled as something like a jpeg, as modern art, or just about anything else. How do you actively detect and block only those data transfers which are encrypted communications? You must allow everything else to pass, with only minimum delay. And. if you don't block the transfer of the encrypted data, law enforcement after the event may be of no use whatsoever, or even be impossible, if it was sent from one PAYG mobile to another, or an internet cafe.
Just some random thoughts as to why Cameron is both right and wrong. He is right to restrict encryption, but wrong in not going after all the places where it already causes a nuisance, and in not formulating clear methods of rapidly identifying and terminating only illegal communications. He really needs to make it illegal to forcibly encrypt a legitimate user's data. The other aspect of that, the HDMI specs, could probably be dealt with by the same EU court that forced M$ to publish their networking specs, if anyone would put up the cash to fund a legal team. Or, Cameron, who has, as I said earlier, quite properly loosened copyright to bring it into the digital age, could take the lead...
This needs a lot more work at the political level, with good technical input, not just from GCHQ, but from security professionals, academics, end users and even some reformed crackers. It should be a comprehensive review of ALL aspects of the use of encryption, to see where it is already causing damage and should be eliminated, as well as where it may need to be made compulsory.