There is a lot that surveillance can do, but there is no single kind of security measure, vetting, physical barriers or online, that will stop every attack.
Doesn't mean we tell the security forces to abandon all efforts to protect us. They have to use all methods allowed by Parliament.
Not all terrorists will use encryption properly all the time. Some of them are thick, not all are computer-savvy.
Many will use social media in their everyday life, which helps track their friends, places, habits and hence helps build up a picture once they become suspects.
btw, Monitoring laws are also used extensively to break hardcore child porn networks.
If the security services want to monitor a specific person - maybe first alerted by not being able to read their EMs - they'd probably install trojan horse or keystroke logging software/hardware on the suspect's computer to capture encrypted keys and passwords.
It would help if they are able to infiltrate / turn one member of the terrorist cell
Also, in the UK, it is a criminal offence under RIPA not to provide encryption keys to police when arrested and required to do so. IIRC, someone suspected of serious child porn offences was jailed a few years ago for refusing to do this.