"The British government" is not a monolith. We have an incredibly dysfunctional cabinet for various dull political reasons, but there are a lot of smart and sensible people in committees and the civil service.
That's an important point that's not always visible from the outside. I worked on implementing payroll system for a federal government and it was eye-opening in my ignorance - I always thought of "The Government" as a monolith with unified voice. nothing could be further from the truth. And different parts have explicitly different goals and prerogatives so its not even necessarily contradictory if e.g. Environmental Agency and ministry for interior development have completely opposite points of view.
Trying to ban encryption while they gaslight you about privacy being important and what companies can do but, as you say, they're one of the most abusive and potentially one of the most careless in relation to the sensitive nature of the data as well (see voter leak).