There's a good article at The Register about the police not making much use of the powers they've had since October 2007 to demand that people hand over encryption keys to material on their computers, on pain of a stay at HM's pleasure of up to five years.
They've used it precisely 8 times. That's one a month. And only four of the eight were actually terror related. So basically they've hardly used one of the powers the government said they had to have, and half of the cases they've used them on had nothing to do with terror. The others were to do with conspiracy to murder, conspiracy to defraud and child porn, which are themselves terrible things, but not terror. At least they haven't used them yet to investigate the computers of parents trying to get their kids into a good school.
Furthermore, here's a piece of not-joined-up government thinking. One of the arguments for the 42 day detention without trial thing is that it gives the police longer to break the encryption on computers belonging to suspects. But they don't need it. If Mr Suspect doesn't give them the key, he can be banged up for five years - which gives the police ample time to crack the wretched thing.