I have just been reading the actual legislation for Early Release of Prisoners, rather than what a journalist or party spokesman may think:
Here is section 7.13 of the memorandum, which is saying people who should be excluded from the legislation for early release.
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Statutory exclusions apply, including all registered sex offenders, those convicted of a violent or sexual offence and serving an extended determinate sentence, and offenders who have ever been recalled to prison for failing to comply with the HDC curfew conditions. Those sentenced to imprisonment for four years or more are statutorily excluded from the scheme. Some offenders may be statutorily eligible to be considered for HDC but are, as a matter of policy, presumed unsuitable for the scheme in the absence of exceptional circumstances. Offenders presumed unsuitable for release on HDC include those serving a sentence for terrorism offences, cruelty to children and homicide.
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So those imprisoned for 16 years fall into the 'more than four years' exclusion. Then there is 'Offenders presumed unsuitable … include …. terrorism offences.'
So no, there was no 'automatic release' for the London Bridge attacker.