Exclusive: UK Government Pushed City Watchdog to Cancel Trans Inclusion Policy

Former equalities minister Kemi Badenoch wrote to the Financial Conduct Authority urging it to rethink plans to allow trans people to self-identify in their workplaces – then the government tried to stop the letter from being released.
kemi badenoch fca
Kemi Badenoch. Photo: HM Treasury / obtained by VICE World News.

The UK government and Britain’s equalities watchdog pressured the country’s financial services regulator to drop its policy on trans inclusion for the 58,000 businesses it regulates, VICE World News can reveal.

Letters we obtained show that Kemi Badenoch, then the government’s equalities minister, and Marcial Boo, chief executive officer of the Equality and Human Rights Commission (EHRC), wrote to the Financial Conduct Authority (FCA) questioning plans to allow trans people to self-identify as male or female in their workplaces. 


The gender-critical letters led to the FCA withdrawing what LGBTQ campaigners called “a hugely progressive trans-inclusion policy”, and instead adopting “an anti-trans approach.”

Badenoch is currently one of the final six candidates in the running to be the leader of the Conservative Party and the Prime Minister, after Boris Johnson announced he was stepping down

The letters were obtained via whistleblowers after the UK government, FCA and EHRC all blocked freedom of information requests on the grounds that revealing the information “could seriously undermine the FCA’s regulatory function.”

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The FCA regulates the financial services industry in the UK, and is supposed to be completely independent. It protects consumers and keeps the industry stable, and it is responsible for the conduct of around 58,000 businesses – which employ over two million people. 

Current and former FCA staff have told VICE World News how the FCA was planning to release the trans-inclusive workplace policy in early 2022, which would have requested the organisations it regulates adopt “self-ID” for reporting on workplace diversity. 


This means, for example, a trans woman in a leadership role in an accountancy firm could be listed as a female employee, and she would then count towards the number of female leaders in finance. 

Following a consultation period, in October 2021, the FCA’s trans-inclusive policy plans were leaked to the British press, triggering a backlash. FCA employees have told VICE World News that “hundreds” of letters were immediately received from supporters of “anti-trans organisations” such as the LGB Alliance and Fair Play For Women. 

One FCA whistleblower – who spoke on condition of anonymity out of fear of losing their job – said: “It felt so calculated. Our really progressive plans were suddenly splashed across British media, and totally spun to create drama, and then we received a ridiculous amount of negative letters. They called trans women ‘men’ and said that our plans would lead to cis-women being erased from leadership roles.

“I couldn’t believe that we received negative letters from the UK’s Equalities Minister and the CEO of the Equality and Human Rights Commission – they should be protecting LGBT rights not working against them. We were so shocked.” 

In letters dated November 2021, both Badenoch and Boo wrote to Nikhil Rathi – the chief executive of the Financial Conduct Authority – pushing for the FCA to block trans women from being able to self-identify as women. 


“The ‘sex’ of an individual is an important protected characteristic,” wrote Badenoch, stating: “It would be helpful to understand what measures are in place to ensure that your approach does not undermine your efforts to measure and improve the representation of the female sex in company boards.”

Boo added: “In UK law, a person’s legal sex is determined by what is recorded on their birth certificate. A trans person can change their legal sex by obtaining a Gender Recognition Certificate.” He says, his concern is that the trans-inclusive policy change “will make it more difficult for you to gather accurate data on the longstanding under-representation of women in senior roles.”

One former-employee, who spoke on the condition of anonymity, because they are still working in the finance industry and feared losing their job, said: “We were all so disgusted that these so-called equality leaders were both effectively calling trans women ‘men’. Trans women are women too.” 

Boo said a meeting between the FCA and the EHRC planned for later that month could “be an opportunity to further clarify, understand your thinking” and “ensure that we can advise as necessary on your future communications”. 

Just one month later, the policy was changed. 

After the leak, FCA employees told VICE World News how FCA bosses “immediately back-pedalled” and “suddenly sided with the anti-trans organisations” to make the upcoming policy “as transphobic as possible.” 


One FCA manager told concerned staff that the proposed policy including trans women would lead to “too many men” in leadership roles, which an employee said was a “deeply transphobic comment.”

VICE World News attempted to access the letters sent by Badenoch and the EHRC through Freedom of Information Act requests sent to the government, the EHRC and the FCA. All requests were blocked.

The responses said: “Should the information be disclosed, it could lead to speculation on the rationale behind our current decision-making process/es on these matters. We have determined that the public interest in maintaining this exemption outweighs the public interest in disclosure of the information”, adding how releasing the requested information “could seriously undermine the FCA’s regulatory function.”

Just one month after the letters were received, the FCA was ready to release completely different guidance, stating that organisations should only recognise trans people as their desired male-or-female sex if they hold a Gender Recognition Certificate – despite only 1 percent of trans people in the UK possessing one.

After these plans leaked internally, LGBTQ staff “massively pushed back” against the proposal.

“It would’ve been like the American trans bathroom bill – only believing trans people are who they say they are if they hold paperwork,” said one ex-staff member. “It’s disgusting.”


Following the complaints from the FCA’s LGBTQ employees, the plans changed yet again, for the final time. It was decided that the FCA would not tell organisations how to define their employees based on sex or gender. 

VICE World News has spoken to two FCA employees who have left the watchdog because of the policy change. They wanted to remain anonymous because of concerns that speaking up would impact their careers. 

“Our leaders made us adopt a spineless approach, in order to keep everyone unhappy,” one of the former employees said.

They added: “The final version is obviously less progressive, but it’s not as terrible as it was going to be after we received the letters. I just can’t believe we had to go backwards on trans equality because of the UK’s equalities minister.” 

“Every person working on the policy wanted trans people to be able to self-identify in their organisations, as they have done for years,” another former FCA staffer told me. They want to remain anonymous because they are worried about transphobic groups harassing their new workplace. “I just couldn’t keep working for an organisation that backed down when LGBTQ people needed it the most.”

A spokesperson for Badenoch said: “In response to a FCA consultation, and in her capacity as Equalities Minister, Kemi wrote to the FCA on how they could comply with the Equality Act and improve the representation of women on city boards".


A spokesperson for the Financial Conduct Authority said: “The FCA is committed to having a diverse workforce – we want all our colleagues to have the dignity and respect they need to flourish, fulfilling their potential without fear of discrimination, harassment or victimisation. Our internal policies set out our commitment to trans inclusion.

“The changes we made to our policy on diversity and inclusion on listed boards were made in response to feedback from Listed Issuers and other stakeholders to our consultation. The final policy allows Issuers to make their own decisions about how they report data, while protecting the privacy of trans board members.”

A spokesperson for the EHRC said: “The FCA was consulting on an important area relating to equality law and the EHRC gave impartial advice, alongside other organisations, to provide clarity on equality legislation. Where rights may conflict, it is important for us to advise on striking an appropriate balance in accordance with the law, and it is then up to individual organisations to determine their own policies.”

Responding to the leaked letters, Bobbi Pickard, CEO, Trans in the City said Badenoch and the EHRC pressuring the FCA “is no surprise, given their constant campaign against trans people – and trans women especially.” 

She continued: “Trans people can already self identify in many areas of life including passports, driving licences and the NHS and have done so for many years without issue. They have also done so successfully within their careers for many years. I can only hope that we obtain a government in the future that leads with empathy, intelligence and integrity – as global business does – rather than one driven by ill-informed vendettas against the most marginalised people in our society."