Aldo.. Alright then, I'll play devils advocate.
What harm exactly could they do with this? I mean, so what if they can track you? What could you do.. and what could they do.. that makes this a problem?
I mean they can find you yes. But assuming you're not doing anything of a criminal nature, I can't see a reason why they'd want to. As has been said a large scale uprising would mean that even if you could find everyone, assuming the uprising was successful, it would be fruitless. Finding someone and stopping them are two different things - you said that yourself with relation to muggers and balaclava...
Well, the easiest argument is - what would Hitler or Stalin do with such a system? Because, even if you don't believe Blair et al are equivalent to that, the next government down the road might be. And surely a fundamental part of democracy is to protect the populace from the possibility of totalitarianism, not remove the obstructions to it.
That is, granted, the easy part. The more subtle, more immediate threats are perhaps a little harder to describe. The first thing is, under a state which desires/needs to excercise complete surveillance, then your chances of being a suspect for no good reason are increased - being in the wrong place at the wrong time (in terms of the police/security service view), and thus being arrested, detained, interned, etc becomes more likely. This is perhaps close to the prior point, though, but worth reiterating in view of the governments' eagerness (and desire) to detain people nigh-indefinately on dodgy anti-terrorism charges.
Also, you risk being labelled as a 'subversive' type by association (meeting, knowing, even passing by frequently) with people opposing the government. That is, something akin to Thatcher using MI5 to infiltrate trade unions, but on a more pervasive manner (imagine if the destruction of Trade Union influence was paralleled by a destruction of political dissedence and thought). On the uprising side of things, this allows security services to identify and 'attack' dissidents before any sort of ground movement can begin.
On top of the latter 2 is the risk of data 'leak'; that is, that this information is sold, stolen or simply lost and ends up in the hands of people whose possesion of it will hurt you, simply by the bias or conclusions they draw. What if (perhaps potential) employers can gain access to your movements and decide you spend too many nights in the pub, for example? Or if Tesco purchase your data and decide you spend too long in Asda and should receive some spam? It seems ludicrous, but there will be a cost to be paid and the government loves cash cows.
Finally, with regards to identification. There's several caveats here, which I avoided going into detail before on. Firstly, it's worth noting that my comment on the ineffectiveness of CCTV against crime was directed at the concept of the current close-to-but-not-all-pervasive, human monitored system (although it's worth noting an automatic system wouldn't prevent crime so much as ease prosecution). But for a national CCTV network with facial recognition (allowing automated tracking) to arise, it's likely there'd also be a system in place that recorded biometric data (i.e. ID cards), allowing easier correlation. Moreso, it'd have the capability to track you all the way to your front door - gathering data that means that whilst you're recorded as 'Citizen#35325" in the database, it's relatively trivial to analyse that and get a name.
In essence, an automated tracking system would be an almost direct equivalent of chipping everyone with a government GPS transponder.
But even if it doesn't work, then it still represents a tremendous waste of money better invested in visible policing, or correcting the social causes of crime.
