JiK - there is worse done by the biggest UK ISP, Btinternet. It runs a system called "cleanfeed" that uses a government approved list of banned sites. If a user tries to access one it displays "404 not found" and bars access. The really scary thing is that it presents stats to the government every month of how many attempts to access barred sites have been blocked. To my mind this necessarily implies that it knows who you are.

Of course they say it is just to bar access to child pornography.

Do you trust a government that controls communications and knows who you are?