This has to be a quick posting - unfortunately I don't have time for a fully researched and referenced article, but I'd like to point out a few things from completely different aspects.
The first is from a policy angle. According to the article, the UK has about 4.5 million CCTV cameras. Most of these camera systems are not run by governmental bodies but instead by companies and the like, if I understand things correctly. (It should be noted that the British public supports the use of CCTV)
Adding microphones to CCTV installations brings up the issue of whether non-governmental entities would be allowed to "eavesdrop".
Aside: For purposes of this post, by the term "eavesdrop" I mean listening to conversations which are thought to be private.Just having a microphone with a camera does not mean that it will be possible to understand individual conversations or even that any collected speech can be listened to or understood by the CCTV operators. For instance, sound captured by microphones can be automatically analyzed (i.e. by a computer) to detect alerting sounds such as gunshots (which are uncommon in most of the UK due to gun control laws), screams or threatening tones of speech. A system could be designed such that the human operator has no access to the audio itself, but is instead only alerted by a text message or other indicator.
To summarize my points from the policy perspective, the act of installing a microphone does not necessarily imply that peoples' conversations are going to be bugged and there are some benefits to be had that do not involve any significant 'invasion of privacy' issues, assuming said system is designed properly. A final policy point is that having private companies collecting conversational speech or installing concealed CCTV in public places raises lots of privacy issues (obviously!). The former seems open to serious abuse unless it is heavily and closely regulated (like the police are). I'm withholding judgment on the latter - there just wasn't enough information in this article for me to form an opinion yet as I don't understand what problem is to be addressed and the perceived benefit.
Although I covered some technical issues while addressing policy, there are a few more points to make from that aspect also. The first is that simply mounting a single omni-directional microphone, no matter how sensitive, up on a pole with a CCTV camera is not going to necessarily pick up conversational speech, as any sound engineer can tell you. What is going to be recorded from way up there by an omni mic during busy times? A cocktail party-like blend of sounds, gunshots, sirens, shouts and other loud sounds is about all that will be heard on the microphone output in real urban scenarios. So, my question is what the microphones are supposed to be for? There are obvious benefits that could be derived, but not without cost and technical implications. It seems to me that there is some need here for some consultations with experts knowledgeable about audio, filtering, and the like before this goes too far.
Anyway, that is all for the moment. Please feel free to comment, but please understand that I wrote this very quickly so I was not able to address all the issues that are raised by the political debate. Nothing is implied by my leaving anything out.