I'm very confused by this, on many fronts.
I don't really know why the government is doing it. It's not for grand headline reasons, as it's all pretty quiet, for this and for prior changes.
I also really don't think the UK is in the grips of some kind of authoritarian nightmare. If anything, my experience is that it's impossible to convince the police to do anything. These days, surveillance state or not, when your car or phone get stolen, the police write you a crime number to take to the insurers and consider their job done. Even if it's all done for nefarious reasons, this would be an easy sidekick to running a surveillance state that earns the state some cash, and every autocrat likes money. The UK democracy is flawed in many ways, but I really don't think a spy state is currently the problem.
So... Why?