Not good. I bet, they are looking to regulate crypto currencies to the ground.
It's lazy to be cynical. They need to do due diligence. Anything they do to make legislation less ambiguous will be good for business engagement and raising people's awareness.
Given the state of the economy and the UK's interest in continuing being 'a' if not 'the' financial centre of the world, I wonder it's more likely they are wanting to make whatever they can of it. The arguements for supporting crypto-trade and currencies seems obvious to those who know anything of it. While Governments might be a bit slow at times, there's no reason to expect them to shoot themselves in the foot. Society will want to benefit in all the ways it can from blockchain technology.