Yes and no. I'm neither a security expert nor an expert in intelligence/counter-intelligence. However, if I were to break a crypto scheme, it is paramount that I never reveal that I have broken the crypto scheme. That way, I can continue to intercept and decode your secrets while you believe that your crypto scheme is safely protecting them.
If AES were broken, the last thing that a government entity would want to do was reveal that it is broken. In fact, if AES has been broken, UK law enforcement officials are extremely unlikely to even be aware of this. It would most likely be an entirely different branch of government (or a different government altogether - e.g. US) who has knows of and has the means to break a scheme like AES.
Don't get me wrong. I agree with your assertion that crypto is good, but this story does not in any way suggest that AES has not been broken yet. I am still suspicious, particularly given that the scheme was "blessed" by the American NSA.