I’m currently at conference, so I have limited internet to do some research on this and it’s come as a complete surprise. I’m pleased to hear that the Home Office is planning to consult on passport gender markers. (Warning: Daily Mail link, but it surprisingly includes some good content.) There’s also this article from the Telegraph, if you’re allergic to Daily Mail content.
I have not seen anything official yet, but the summary seems to be that it’s a “wide ranging” consultation, not just gender markers and the options being considered are allowing “X” for Unspecified as a marker, or just scrapping markers for everyone and using X across the board. (You have to have a gender field on a passport, it’s in the international standard)
I would be stunned if the latter option passed but it’s good that it is being considered. Of course, there is also the chance to allow people to put the point that a doctors letter should not be required for a gender marker change on a passport and one should just be able to do it.