A bit of legal pedantry
A quick skim over the draft Terrorism Bill (.pdf) raises a number of concerns. Doubtless there'd be infinitely more were I to read it in full (especially were I to compare it to other anti-terrorism legislation from around the world), but I've got real-world deadlines for things that actually earn me money, so I'll have to leave it to others.
I am, however, somewhat concerned that when you say that anyone who "glorifies, exalts or celebrates the commission, preparation or instigation (whether in the past, in the future or generally) of acts of terrorism"* is committing an offence, precisely what is meant by "glorifying", "exalting" or "celebrating" is left unclear.
I also don't like the idea that "A person is guilty of an offence under this section in respect of a statement glorifying, exalting or celebrating anything occurring more than 20 years before the publication of the statement only if the statement relates, whether directly or indirectly, to conduct or events specified for the purposes of this section by order made by the Secretary of State."**
This effectively wipes from existence any act of terrorism pre-1985 unless Charles Clarke specifically, officially declares it to be terrorism. So the 1984 Brighton bomb which nearly wiped out Thatcher and her Cabinet would - technically - no longer count as an act of terrorism unless the Safety Elephant specifically sets out a statutory instrument*** declaring it so to be. And if he did that, then anyone who ever jokes about it being a shame they missed risks five years in prison****.
It also - again, technically - for the first time creates the concept of "official history" as historic groups who used tactics which could be considered "terrorist" (the Chartists etc.) would now only technically be considered such if they were on the Home Secretary's official list. A perfect cop-out for any history students presented with "Were the Suffragettes' tactics terrorist in nature?" type questions - just put "No - because Charles Clarke says so".
* Part 1, Section 2, Subsection 1(b)
** Part 1, Section 2, Subsection 3
*** Part 1, Section 2, Subsection 4
**** Part 1, Section 2, Subsection 5(a)