I coincidentally just attended a briefing on copyright given by our lawyers on Thursday and the basic message was that the exemptions are complex and incredibly tight and have gotten much tighter recently (particularly "non-commercial" is a shadow of its former self).
From Wikipedia:
http://en.wikipedia.org/wiki/Fair_dealing
"Fair dealing is an enumerated set of possible defenses against an action for infringement of an exclusive right of copyright. Unlike the related United States doctrine of fair use, fair dealing cannot apply to any act which does not fall within one of these categories. In practice, common law courts might rule that actions with a commercial character, which might be naïvely assumed to fall into one of these categories, were in fact infringements of copyright as fair dealing is not as flexible a concept as the American concept of fair use."
The fact that "fair dealing" is a list of narrow exemptions in the legislation, rather than a general concept is why we're still waiting for new legislation that will allow us to legally rip CDs to put on our iPods while in the US a judge can decide that it is "fair use".
http://www.copyrightservice.co.uk/copyright/p09_fair_use
But, in most ways it is less permissive than US 'fair use'. There again, most of the US fair use rationale isn't codified per se, but based on court interpretation and precedence, and since the UK has nowhere near the level of precedence in that area, it's understandable.
The UK fair use policy DOES offer some slightly more permissive commercial uses however, for example recent spates of youtube videos being pulled because a commercial song was playing on a radio in the background would be 'fair use due to incidental usage' under UK law.