Holy. Crap. I knew the UK was going off the deep end with these laws, but this actually looks like China-level government reach.
Unlike banning porn, banning VPNs has no political value because the technically inept voters who support these age verification policies don't know what a VPN is.
If you're China, yes. If you're a large and powerful western country, not so much.
The way to do it would be through the concept of "data laundering." Just like the US does with money laundering, the government would publish a list of all organizations and individuals engaged in the practice. All companies operating in that country would need to (globally) sever all ties with everybody who is on the list. Everybody else could choose between doing the same or ending up on the list themselves.
Only powerful countries could do this effectively, less powerful ones would just isolate themselves, just like China did. The US could definitely do it. The EU, UK, Japan and maybe India probably could, but it would be dicy. Everybody else would fail spectacularly.