This is utterly stupid and I agree it needs to be highlighted however it's worth pointing out that a public consultation doesn't mean squat.
They're asking the general public if they think that VPNs should be regulated. They are not asking experts for feasibility studies. So even if we take it as red that this is 100% definitely going to happen, they are at stage -1 of the process right now, and we all know the speed which politics moves (continental drift in slow motion).
I would actually be perfectly prepared to put money on this not actually happening. Labour do not need more reasons for people to hate them.