How exactly do you think cloud services could run with encrypted data?
Either the cloud service can decrypt your data (in which case the government can order them to decrypt it for the government), or the cloud service cannot, in which case the cloud service can't do anything useful with your data whatsoever.
Either the cloud service can decrypt your data (in which case the government can order them to decrypt it for the government), or the cloud service cannot, in which case the cloud service can't do anything useful with your data whatsoever.