I don't think this will make a blind bit of difference to our civil liberties. It will save some money theoretically but in practise not much, as a lot of money has already been spent, or will be spent in closing it down.
I also think even the ConDem government will embrace new technology in the end. CCTV has had an impact on crime, people are being caught because of it, ditto the DNA database which has not only captured criminals who would never have been caught but actually enhanced our liberties by proving innocence of those already convicted or accused of crimes.
A lot of NO2ID propaganda is about technophobia, not all of it, but a lot. There is far more surveillance by the private sector than by the government. Somehow this is strangely more accepted by NO2ID and the general population. Perhaps its the fact the Tory fanzine press are obsessed with anything negative about a government when their people don't control it and the private companies spend billions to tell us how nice they are in the same Tory press, which buys the media silence.