Cory Doctorow has a thorough rundown in BoingBoing:
What David Cameron thinks he's saying is, "We will command all the software creators we can reach to introduce back-doors into their tools for us." There are enormous problems with this: There's no back door that only lets good guys go through it. If your Whatsapp or Google Hangouts has a deliberately introduced flaw in it, then foreign spies, criminals, crooked police (like those who fed sensitive information to the tabloids who were implicated in the hacking scandal—and like the high-level police who secretly worked for organised crime for years), and criminals will eventually discover this vulnerability. They—and not just the security services -- will be able to use it to intercept all of our communications. That includes things like the pictures of your kids in your bath that you send to your parents to the trade secrets you send to your co-workers. But this is just for starters. He doesn't understand technology very well, so he doesn't actually know what he's asking for.
For David Cameron's proposal to work, he will need to stop Britons from installing software that comes from software creators who are out of his jurisdiction. The very best in secure communications are already free/open source projects, maintained by thousands of independent programmers around the world. They are widely available, and thanks to things like cryptographic signing, it is possible to download these packages from any server in the world (not just big ones like Github) and verify, with a very high degree of confidence, that the software you've downloaded hasn't been tampered with.
There's much more to the piece. "If any commodity PC or jailbroken phone can run any of the world's most popular communications applications, then 'bad guys' will just use them," it concludes. "Jailbreaking an OS isn't hard. Downloading an app isn't hard. Stopping people from running code they want to run is hard, and what's more, it puts the whole nation–individuals and industry–in terrible jeopardy."
And if Britain improbably succeeded in creating a society where its security services could read anything communicated online, if its citizens bore all the costs in the forms of decreased privacy, inferior technology, and vulnerability to abuses, would the country then be safe from terrorist attacks like the one in Paris? Of course not. Guy Fawkes and his co-conspirators didn't need the Internet to nearly succeed in blowing up parliament (nor were they stopped by signals intelligence). Terrorists will always find methods of communication that are relatively hard to intercept, whether communicating in code online or sending documents via bike messenger or notes via pigeon or through unwitting children.
There is, if all else fails, meeting face-to-face to plan a future murder.