This isn't news unless I'm missing something. RIPA already gives them this power and when the govt activated the last section of RIPA (last year?) then all ISPs are now obliged to record every data request made by your computer/network. That's every webpage, email, IM etc etc.
In short this is already happening.
The only thing I can think of is that the muppets want all inbound (ie not initiated by you) traffic logged too.
You should always assume that everything you do online is logged somewhere because it is.