Maybe. It looks like they want timing data too (same as NSA), not just standard IP data retention stuff. If they keep database of timing information for a large number of packets in UK, they will probably have pretty decent luck to deanonymize people even if they are using Tor or a VPN. They will become a passive adversary in the context that all UK Tor nodes will be essentially worthless for hiding from them, it would be as if they themselves owned every Tor node / VPN node / Proxy being monitored with this system (low latency can not protect at all from passive attackers linking in and out packets). For NSA having these abilities is enough for them to passively pwn Tor they essentially own every USA node since they can passively monitor traffic in and out, and a lot of nodes are in USA (and no you should not stop using nodes in USA! Let Tor pick your path as always!). Plus they can see all foreign traffic that is routed through exchanges. The GCHQ may not be in as ideal a location as NSA is, to gather as much damning signals, but when you are up against world leading signals intelligence agencies who are monitoring all traffic in their country, you are going to have a pretty hard time to keep yourself anonymous from them, especially if you live in their country and a substantial amount of nodes on the network you use relay traffic through their country / the website you visit is in their country. In all cases they would be able to link UK to UK communications even if the relays are in three random other countries, since seeing entry and exit is all it takes for timing data to link packets together. It is scary that they want to give police access to this information. In the USA it appears to only be in the hands of the NSA, although nothing is legally stopping the feds from doing passive monitoring of Tor relays in USA under CALEAs trap and trace / pen register provisions.