I don't think the UK government would try to put Apple out of business if they don't comply it's more likely that they would just get heavily fined until they do so. The most likely outcome, I would guess, is that Apple just stop offering Advanced Data Protection as a service in the UK rather than create some kind of backdoor. It's a weak proposition from the government because anyone with something to hide will just…
I suppose there are people in the camp advocating for back doors who still think it’s worth the tremendous downsides to be able to catch that group of criminals (there are certainly plenty of idiot criminals), but anybody can just use plain GPG emails for free, or deploy some open source encrypted chat server on a $20 a month cloud instance… and I assume operators in places like Russia or China won’t mind hosting easy services for less nerdy criminals willing to pay in crypto.