Thanks to idc, ra2000 and Orinoco for letting us know about this news.  Orinoco wrote in with the following:

Earlier in January an e-petition was raised with the UK Government to "...create a new exception to copyright law that gives individuals the right to create a private copy of copyrighted materials for their own personal use, including back-ups, archiving and shifting format."

The Gower report was commissioned in December 2005 to look into the intellectual property framework in the UK and that report included the points raised in the e-petition. The following quote comes from the Government's reply to that e-petition;

"The findings of this review have now been published and recommend the introduction of a private copying exception for the purposes of format shifting. This would allow individuals to copy music which they have legally bought on compact disc onto an MP3 player without infringing copyright.

The Government welcomes this recommendation and is currently considering how such an exception should be created in UK law."

I think the fact it specifically doesn't mention backup and archival is interesting, but it is still a step in the right direction

The full Gower report can ge obtained from the HM Tresuary Website here.