A database, possibly, just not an "enormous" one.

Her department, the ³ÉÈË¿ìÊÖ Office, said one option being considered was a database that would store the phone numbers dialed, the Web sites visited and the e-mail addresses contacted by every one in Britain.
But while the who, what, when of communications may be retained the content of communications will not be stored:
"There are no plans for an enormous database which will contain the content of your e-mails, the texts that you send or the chats you have on the phone or online." said Jacqui Smith
There's in-depth reporting and analysis of Jacqui Smith's speech
All this is inline with the claims we reported back in July The , conducted a few days after that initial report, has been widely quoted today.
And a reminder that if you haven't heard the podcast there's a timely discussion of a major US study into databases and the limits on their usefulness in combating terrorism. The discussion on the difficulties of combining different data-sets seems particularly relevant.