This is just laying down the ground work for Russia-style deep packet inspection. “We don’t have a capability to censor the foreign internet, so we need measures to cut off the violating sites from our side”
deep packet inspection is not really necessary, headers contain information about the destination, as long as you don’t encrypt those, there is no need to do any decryption.
Likely yes IMO, especially since the UK is making moves to militarize.
I think it’s an open question whether the British state has the technical chops, money and willingness to implement a Great Firewall type solution.
The state isn’t totally incompetent but doing it properly would be a serious undertaking, the kind of thing where the recent track record of big government tech projects isn’t great