Downing Street’s unprecedented veto of Holyrood’s contentious gender recognition reform bill was lawful, Scotland’s highest court has ruled. The bill, which was passed by a cross-party majority in the Holyrood parliament last December, would have made Scotland the first country in the UK to introduce a self-identification system for people who want to change their legally recognised sex. In a decision that has disappointed LGBTQ+ campaigners but offered a boost to Rishi Sunak at the end of a testing week, Lady Haldane rejected the argument from Scottish ministers that that the use of the section 35 veto – invoked here for the first time – marked an “impermissible intrusion on the constitutional settlement”. But Haldane added that, while the challenge to the section 35 order – contained in the 1998 Scotland Act, which created the devolved parliament – failed, it remained “important to recognise the novelty and complexity of the arguments”. The ruling was welcomed by the Scotland secretary, Alister Jack, who made the order to prevent the bill going for royal assent in January this year, arguing it cut across existing UK-wide equalities legislation. He said: “I was clear that this legislation would have had adverse effects on the operation of the law as it applies to reserved matters, including on important Great Britain-wide equality protections. “Following this latest court defeat for the Scottish government, their ministers need to stop wasting taxpayers’ money pursuing needless legal action and focus on the real issues which matter to people in Scotland – such as growing the economy and cutting [healthcare] waiting lists.” The Scottish government’s social justice secretary, Shirley-Anne Somerville, said: “Devolution is fundamentally flawed if the UK government is able to override the democratic wishes of the Scottish parliament, and veto our laws at the stroke of a pen.” Writing on X, the Scottish first minister, Humza Yousaf, said the ruling was a “dark day for devolution”. Vic Valentine, the manager of Scottish Trans, urged Scottish ministers to lodge an appeal, noting that the ruling was not about the merits of the bill. “We are really concerned that this judgment, if left unchallenged, means that trans people will continue to have to use the intrusive, unfair and expensive process for being legally recognised as who we truly are,” they said. Maggie Chapman, the equalities spokesperson for the Scottish Greens, who made progress on gender recognition reform a key plank of their governing partnership with the Scottish National party at Holyrood, described the ruling as “a devastating day for equality [and] a democratic outrage”. She said she hoped the Scottish government “will consider all options for appeal”. The Scottish government has 21 days to appeal against the ruling, but there are internal concerns that the SNP cannot afford further hefty legal fees at a time when voters want it to focus on the cost of living crisis. Women’s groups who have campaigned against the bill were in celebratory mood, thanking Jack for his intervention. Critics of the bill argue that it would fundamentally alter who can access women-only services and leave them vulnerable to abuse by predatory male offenders. Labour’s shadow Scotland secretary, Ian Murray, said the ruling was disappointing but should be respected. “It is shameful that after years of debate, trans people feel no more protected and women no more reassured,” he said. “This is another demonstration of why both governments have to work together rather than spending taxpayers’ money fighting in courts and pitting communities against each other.” Responding to the “disappointing” ruling, Colin Macfarlane, the director of nations at Stonewall, said: “This unfortunately means more uncertainty for trans people in Scotland, who will now be waiting once again to see whether they will be able to have their gender legally recognised through a process that is in line with leading nations like Ireland, Canada and New Zealand.” Earlier this week, the UK government’s women and equalities minister, Kemi Badenoch, announced a “long overdue” update to the list of approved countries from which the UK will accept gender recognition certificates, pledging to exclude those that allow self-identification. Setting out the UK government’s case at a hearing in September, David Johnston KC said the principal concern was the interaction between the 2004 Gender Recognition Act, which set up the certification process being changed by the Holyrood bill, and the Equality Act. In her 65-page judgment, Haldane concluded the bill did modify the law – a key test for invoking section 35 – “since the whole purpose … is to widen the category of those who may apply [for a gender recognition certificate], and to simplify the overall process by which a certificate may be obtained”.