Honestly I don't think Apple would even need to work with other tech giants on this (although that would help). The UK makes up a few percent of Apple's total revenues so while Apple would take a hit, they can afford to pull out of the UK and it could be worth doing if they're serious about proving how important privacy is to them.
Apple will face some reputational harm should they choose to put a back door in their products at the threat of an authoritarian government, and that harm will need to be weighed against the cost of pulling out of the UK entirely.
And realistically Apple announcing that they're going to pull out of the UK will result in panic in confidence in UK tech. How the hell are we going to build competitive tech companies if developers can't even access Apple products? And after 14 years of economic stagnation it's not like we have excess growth we can give up...
Apple should be very firm in their response to this. The UK are over playing their hand.