It seems that the British are attempting to accomplish the technological and political feat that the Stasi were never quite able to do in East Germany, and create a total surveillance state:

Ministers are considering spending up to £12 billion on a database to monitor and store the internet browsing habits, e-mail and telephone records of everyone in Britain.

GCHQ, the government’s eavesdropping centre, has already been given up to £1 billion to finance the first stage of the project.

Hundreds of clandestine probes will be installed to monitor customers live on two of the country’s biggest internet and mobile phone providers - thought to be BT and Vodafone. BT has nearly 5m internet customers.

As Jacob Sullum points out, the UK already has the largest number of cameras per capita.  Because George Orwell, author of 1984, was born in England, many people like to compare these types of news items to his famous book.  But to be honest, I don't think that goes nearly far enough, nor does it have the correct impact.  1984 was a fictional story, and many people can simply say, "but we'll do it better."

Instead, I prefer to compare this to a real life endevour by a government to spy on its people... the East German Stasi.  The East German secret police were increcibly good at what they did, especially given the technology they had at their disposal at the time.  They monitored millions of hours of telephone calls (mostly international ones), and monitored (by some counts) half of all regular mail correspondence, both foreign and domestic.  They had machines designed to unseal and reseal envelopes after inspection.  They even went so far as to collect "the smells" off of people in case they needed to be tracked by dogs.

Of course, the East German's also knew they were being spyed on, which led in many cases to a distrustful populace that was often times willing to report (many times erroniously) on their neighbors in order to divert suspicion from themselves.  We should also remember that between 150 and 200 people died in escape attempts from East Berlin alone.  Hell, was the Cold War not in part fought because we had to battle against the "Evil Empire"?  How does it honor those who fought and died in that undeclared war if one of the greatest Western Empires turns Evil themselves?

Congratulations MI5 ... you just turned yourselves into the Stasi.