Nearly every EU country is documented to have similar programs, not just the UK. Some are even much more aggressive about industrial espionage - for example, France. When European politicians make noise about using European-based services, it isn't so they can be sure your privacy is protected, it's so EU-based organizations can access those servers without having to negotiate with the NSA. As a side benefit, they can claim it's good for the local economy.
The NSA revelations are just a pretext. Every European country knew exactly what was going on; they were complicit in it and they had varying levels of sharing agreements with the NSA.
It's not as clear-cut. The motivation of pro-privacy MEPs from the left-wing EU parties are most likely entirely different from the ones of the Council of Europe. But your point about most EU intelligence services being engaged in spying on EU citizens stands, unfortunately.
Whilst most of the larger EU countries have some civil spying program, the UK operates on a much wider scale throughout the world. It is also particularly concerning for me in Ireland as a large portion of Irish internet traffic must flow through the UK, and there are specific monitoring stations setup to intercept this fibre.
The NSA revelations are just a pretext. Every European country knew exactly what was going on; they were complicit in it and they had varying levels of sharing agreements with the NSA.