New law on encryption keys scares me

There is an article on ZDNet News looking at how the power of the Government to force handover of encryption keys. First of all, it is already law that you have to hand over encryption keys of face 2 years in jail (5 if you are a terrorist suspect – so if you are wearing a coat on the underground!). I completely understand why they made these laws, but the actual implications of them are scary…

Suppose I use public key encryption (which I do) to send an encrypted email to a friend. It does not matter what I say because only he can read it. He replies and only I can read the reply. Now imagine my hard disk dies, and I do not have a backup of my decryption key, but the encrypted email is still on my mailserver. The police arrest me for something (possibly as above being a geek on the underground), they look through my email and find the encrypted email. They demand the key. I say I don’t have it (which is true, I don’t have a copy as my hard disk died and was thrown out). I end up being imprisoned for 2-5 years because I did not keep a copy of the key securely…

Now let’s say that the email above was really old and I threw out that key ages ago and set up a new one. I might still have a copy of the key to decrypt that email with, but more likely is that I don’t need that email any more and the key has been deleted and I never got round to deleting the email from my server (i.e. Gmail). The same could happen…

This law is not scary because the police can force you to hand over your key (not just decrypt one email, but all of your emails not to mention send emails that are authenticated as from you), but they can arrest you not just for refusing, but if you actually cannot comply. What sort of law makes you guilty for not doing the impossible?

Update:
I wanted to add something for those people that will say “the only people that need encryption are those with something to hide”. But everyone has something to hide… Like banking details. I could email a trusted friend my bank details when I go on holiday so they can sort out a money problem or whatever. Of course I want to encrypt that email, what if the network admin’s want to read my emai? You think your email is safe? there are many people able to read your email, and thats just counting those that are allowed to. Then there are crackers trying to break into servers and email accounts so they can use your accounts with online shops to buy things.

Personally I would prefer that every email sent to me with a password was encrypted, that way even if someone broke into my email account, they couldn’t get anything other than chain mail’s and jokes.