Gender Recognition Reform (Scotland) Bill: business and regulatory impact assessment

3. Options

3.1 Option 1: no change

3.2 Option 2: take forward the Bill

3.3 Sectors and groups affected

3.4 We consider that the following groups or sectors are affected:

• Trans people who want to be legally recognised in the gender with which they identify and in which they live;
• Their spouses or civil partners;
• The Registrar General for Scotland ("RGS") and National Records of Scotland ("NRS") - who currently deal with updating the Gender Recognition Register and issue updated birth certificates to successful applicants for legal gender recognition under the GRA who were born or adopted in Scotland. Under the draft Bill NRS would receive, consider and process Scottish applications for gender recognition;
• Employers and business - who may engage with a transgender employee or customer, who is seeking to transition to an acquired gender or is living in their acquired gender and who may obtain legal gender recognition; and
• Pension providers (including businesses with their own employee pension schemes), and which schemes may have members who have changed their legal gender.

Benefits and costs

Option 1: no change

3.5Option 1- Benefits

Legal gender recognition would still be available using the existing GRA process. This may have the benefit of stability and there would be no need for further legislation.

3.6 Option 1- Costs

3.6.1 No set up costs or running costs would be incurred. Applicants would still (in the majority of cases) have to provide medical evidence and evidence of their having lived in their acquired gender for a defined period ending with the date of their application. People aged 16 and 17 could not apply for legal gender recognition.

Option 2: adopt a gender recognition scheme as per the draft Bill

3.7 Option 2- Benefits

3.7.1 This would meet the objective of removing intrusive requirements and streamlining the existing process. It would also allow people aged 16 and over to apply.

3.8. Option 2- Costs

General

3.8.1. Option 2 would not lead to significant costs. The possibility of legal gender recognition is already provided in the GRA. The majority of associated costs have been incurred with the introduction of the GRA. The Bill is not proposing changes to the rights and responsibilities arising as a result of gender recognition.

Business

3.8.2. In practice, businesses and the third sector must already recognise and respect transgender people who are living in, transitioning to live in, or intending to transition to live in, accordance with their gender identity whether or not they then obtain legal recognition under the GRA. This is because under the Equality Act 2010 it is unlawful, subject to limited exceptions, to discriminate against a person who has the protected characteristic of gender reassignment. Section 7(1) of the 2010 Act provides that "a person has the protected characteristic of gender reassignment if the person is proposing to undergo, is undergoing or has undergone a process (or part of a process) for the purpose of reassigning the person's sex by changing physiological or other attributes of sex."^[6]

3.8.3. Overall, the organisations interviewed in preparation for the draft BRIA carried out for the 2017 consultation (for which see Part 4 of that draft BRIA) took the view that there would be minimal costs for them, if Scotland adopted a system of legal gender recognition based on an applicant's statutory declaration. Two of those interviewed felt that smaller organisations might not have formulated a policy in relation to gender diverse employees and service users and that an increase in the numbers of people obtaining legal gender recognition might increase the likelihood that a business would encounter a transitioned or transitioning employee or customer. This may require such organisations to incur costs in formulating policies. However, these costs would not be the direct result of the adoption of Option 2.

Costs for the Registrar General for Scotland (RGS)

3.8.4 There would be costs relating to the need for the RGS to receive, consider and process Scottish applications if the draft Bill were enacted, replacing the Gender Recognition Panel in Scotland. (When the GRA came into effect, the UK Government indicated that the cost of establishing the Gender Recognition Panel would be £0.7 million^[7]. No contribution has been sought from Scotland towards the running of the Gender Recognition Panel.)

3.8.5. There would be no capital costs in this area.

3.8.6. We estimate that there would be one-off set up costs associated with IT systems, application forms and for training and familiarisation events for staff dealing with applications. These costs are in the range of £300,000 to £350,000.

3.8.7. Running costs will primarily depend on the numbers of applicants. Only a small number of respondents commented specifically on the contents of the BRIA published as part of either the 2017 or the 2019 consultation. Some respondents to the 2017 consultation expressed concerns about the Scottish Government's estimate of costs. The predominant view was that the potential number of applicants had been under estimated; others however considered the estimates appropriate.

3.8.8 Based on international evidence (outlined in more detail below), the Scottish Government considers that the Bill, if enacted, is likely to lead to an overall increase in the number of successful applications.

3.8.9. The most recent estimated population of Scotland is 5.47 million people. The Republic of Ireland has a slightly smaller population than Scotland.^[8] Between September 2015 (when their new arrangements started) and the end of 2019, a total of 579 people had obtained recognition under Ireland's Gender Recognition Act 2015.^[9] This is an average of 123 applicants for each year of operation.

3.8.10. Denmark has a slightly larger population than Scotland.^[10] Since the introduction of a reformed process for gender recognition based on an applicant's declaration, Denmark has granted an average of 220 applications per year.

3.8.11. Norway, which has a population of 5.37 million has experienced a higher initial uptake than Denmark or the Republic of Ireland. From the introduction of their new system on 1 July 2016 up to and including the first quartile of 2019, a total of 1560 applications were received, at an average of around 550 applications a year.^[11]

3.8.12. In the light of this information, we consider it reasonable to estimate that the numbers of Scottish applications would be around 250-300 applications per year. Currently, around 30 people per year who were born or adopted in Scotland obtain legal recognition of their acquired gender under the GRA. There are no statistics available for applicants resident in Scotland who apply under the current arrangements.

3.8.13. Based on this estimate of application numbers, we anticipate that the running costs would be up to £150,000 per year. These costings assume that applications would be handled by a team of 3 staff with support from other existing RGS staff. (In Ireland, applications are handled by 4 staff in the Client Identity Service which is part of the Department of Employment Affairs and Social Protection. These staff do not work solely on gender recognition applications.)

Costs to the Scottish Courts and Tribunals Service

3.8.15. We consider that any costs for the Scottish Courts and Tribunals Service, would be minimal. There may be more people making statutory declarations for the purposes of gender recognition before a Justice of the Peace (JP) if the scheme envisaged by the Bill should be implemented. SCTS do not currently levy a charge for witnessing documents, which is part of the regular duties of a JP, and will not in any event result in unique costs for the SCTS.

3.8.16. In addition, under the Bill:

• a person who divorces, or whose civil partnership is dissolved, on the basis of the issue of an interim GRC can be granted a full GRC by the court [this reflects the current arrangements]
• a person who has an interim GRC can in certain circumstances apply to the sheriff for a full GRC [this reflects the current arrangements]
• an applicant who has been refused a full GRC by the RGS could, after the application has been reviewed, appeal to the sheriff court. [Based on current experience, the expected number of appeals is very low. There has been one appeal heard in the Court of Session.]
• if there is evidence a GRC has been obtained by fraud, an application could be made to the sheriff court or the Court of Session for the GRC to be quashed. Such applications are expected to very rare.^[12]

3.8.17. The Scottish Government does not currently hold data on the costs of individual proceedings. The SCTS charge court fees for various stages in the court proceedings based on Fees Orders set by Ministers. Whilst court fees may be waived if the applicant is in receipt of legal aid or otherwise qualifies for fee exemption, in the round SCTS will recover much of the costs of civil business through the court fee system.

Costs to the Scottish Legal Aid Board

3.8.18. The impacts for the Scottish Legal Aid Board are considered at section 6.

Costs in relation to pensions

3.8.19. Pension policy is a reserved matter to the UK Government, although there are some executively devolved powers in relation to pension policy for certain public service schemes in Scotland.^[13] A change of legal gender has the potential to affect pension rights. However, we consider that the impacts of the adoption of Option 2 from the perspective of a successful applicant's pension rights or of their survivor's pension rights are now minimal.

3.8.20. The state pension age has now equalised for men and women. Consequently, gender recognition no longer has the potential to affect whether a person who is legally recognised in their acquired gender becomes entitled to the state pension at an earlier stage or later stage.

3.8.21. However, a change of legal gender can affect rights to occupational pensions. Historically, men and women have been treated differently for pension purposes, as have widowers, surviving civil partners and same-sex spouses in respect of survivor rights in pensions.

3.8.22. In some cases, where a member changes their legal gender from male to female, there are protections for their surviving female spouse to ensure that they do not lose entitlement as a result of their spouse's decision to change their legal gender.^[14]

3.8.23. As stated above, historically survivors in same sex marriages and civil partnership have been treated differently for pension purposes and previously, because mixed sex civil partnerships could not be registered in Scotland, a civil partner who wished to obtain gender recognition may have needed to agree with their civil partner to convert their civil partnership to a marriage or dissolve the civil partnership. This position changed with the introduction of the Civil Partnerships (Scotland) Act 2020 which allows for the registration of mixed sex civil partnerships in Scotland.

3.8.24. In the Supreme Court decision in Walker v Innospec Limited [2017] UKSC 47^[15] the court dis-applied an exception in the Equality Act 2010 which allowed defined-benefit occupational pension schemes to restrict access to survivors' benefits, for survivors of a civil partnership or same-sex marriage, to benefits based on accruals from December 2005 onwards. As a consequence, changes are now being introduced to public service pension schemes. These changes align pensions paid for survivors of same sex marriages and civil partnerships with those paid to widows (i.e. female survivors of mixed sex marriages): in these cases, the member's full service is used to determine entitlement. The existing restriction of only using service from 1988 onwards for widowers (i.e. male survivors of mixed sex marriages) continues to apply. The UK Government has announced that it intends to align survivor benefits for mixed sex civil partners with those that are available for survivors of mixed sex marriages.^[16]

3.8.25. Private sector schemes are responsible for ensuring that they are compliant with the Walker judgment. Based on evidence from the interviews we undertook for the draft BRIA in relation to the 2017 consultation, it seems many schemes already either make no difference in their terms or nonetheless decided to treat civil partners and spouses (whether they are in same sex or mixed sex marriages), in the same way. This is confirmed by information available from the UK Government.^[17]

3.8.26. The Bill if enacted would allow an applicant in any marriage or civil partnership to remain in that marriage or civil partnership in certain circumstances. What is changing is the way in which legal gender recognition is obtained: the rights and responsibilities are not changing.