So, if I use strong encryption in Internet traffic or on my disk drives, they're seriously proposing to throw me in jail?
No. They never were serious about that (although they said it to bring a few more out-of-touch, harumphing, something-must-be-done types on board before the election).
What they are serious about is "forcing" the big app players to co-operate. But they have (at last) realised that openly forcing them (like writing a law that says they have to) is likely to fail spectacularly (pushback from ordinary people, house of lords, foreign internet firms, UK internet firms, ECHR, etc).
So, expect to see a UK CISA just as soon as the fuss about the US version has died down.