Well, sure, Tor provides very good anonymity and should be able to do so even when this system is introduced: ultimately, they're not going to know what you're doing and shouldn't be able to see who you're connecting to on the other side of the Tor network. The problem is that your ISP knows who you are, knows where you live and knows that you're using Tor for some reason (one could deduce from the logs that you're using Tor as they'll show that you're connecting to a Tor node or they'll be able to use packet inspection). Given that the government will have access to your ISP's logs, they'll know that you're using Tor and, consequently, you reveal that you've got something to hide.
End results is that you look suspicious: even if you're only trying to hide a minor secret (researching an embarrassing health condition over your landlord's wifi, say), it might cause the government to use heavier tactics against you in order to learn what it is. While this sounds paranoid, most people forget that the UK has a huge amount of existing legislation that would allow them to do this legally, easily and sometimes without court oversight.
Examples: tap your phone, track your cellphone, inspect your mail, watch your credit card transactions, read your email or, perhaps scarily of all, track your car using the automated license plate recognition system that exists on all UK highways. I'm not making this stuff up:
http://en.wikipedia.org/wiki/Police-enforced_ANPR_in_the_UK UK domestic surveillance is frighteningly draconian and, amazingly, none of the population (many of who are convinced by "won't somebody please think of the children?") actually seem to give a damn.
