> For example, if your site requires cookies to function, what should it do if a visitor declines permission?

If I'm reading the guidance[1] correctly (and I've only skimmed it), you don't need permission for essential cookies. Most sites just display a message along the lines of "We're using cookies; your continued use of this site gives consent" etc..

[1] http://www.ico.gov.uk/for_organisations/privacy_and_electron...