Rapists can no longer claim to be women
Forces are now expected to begin recording criminals' birth sex rather than preferred gender in official crime statistics following the ruling, which stated that trans women are not the same as biological women under equality laws.
It will end a situation where some police forces record rapists as being women, even though the legal definition of the crime requires a penis.
Campaigners, including gender critical police officers, have hailed the move as a victory for common sense and have said it will help restore public confidence in policing.
Current guidance from the National Police Chiefs' Council (NPCC) recommends forces ask suspects if they are 'male', 'female' or 'intersex'.
But it goes on to state that: 'Using the term 'gender' as a substitute for the term 'sex' is not appropriate as gender is not a protected characteristic.
'Gender is a social construction relating to behaviours and attributes based on labels of masculinity and femininity.'
However, not all forces follow the guidance and a recent report into the way public bodies collect data on sex and gender revealed that at least 12 police forces allowed rape suspects and other sexual offenders to self declare their preferred gender identity.
This means men arrested on suspicion of violent sexual attacks can self-identify as a woman and be recorded as such on official statistics.
The records form part of the annual data requirement (ADR), submitted by every police force in England and Wales to the Home Office.
Last year, in a change of policy, Police Scotland announced that rape suspects would no longer be able to self identify as female.
It followed controversy over the case of Adam Graham who began identifying as a woman named Isla Bryson while awaiting trial accused of two rapes.
After being convicted and jailed for eight years, Bryson was initially sent to a women's prison, but he was subsequently moved following a public outcry.
Following the scandal, the NPCC announced a review into the issue in England and Wales, but it has yet to report.
Police sources who have examined the Supreme Court ruling in detail believe it will sweep away the current confusion around transgender sex offenders.
David Spencer, head of crime and justice at the Policy Exchange, said it was time for policing to adopt a common sense approach.
He said: 'This week's judgment by the UK Supreme Court shines a light on policies across the public sector.
'An independent review this year found police forces do not consistently record the natal sex of alleged sex offenders – meaning suspected rapists may not be accurately recorded in police records.
'This could have grave consequences for whether the police are able to effectively investigate sexual offences.
'This is the sort of nonsense which leads to the public losing confidence in the police. As Policy Exchange has repeatedly made clear - it is long past time for police chiefs to adopt a common-sense approach to their work.'
A spokesman for the group SEEN UK, a network of serving officers who hold gender critical beliefs, also welcomed the ruling and urged all forces to ensure full compliance with the Equality Act 2010, as clarified by the court.
He said: 'The police service is bound by a duty to uphold the law impartially and without fear or favour. That duty must not be compromised by political or ideological pressures.
'The rights of women and girls, especially those enshrined in sex-based protections, are a matter of law, not preference.
'The Supreme Court has now spoken with clarity. The responsibility to act in accordance with that ruling rests squarely with those entrusted to enforce the law.'
Chief Constable Rachel Swann, chair of the National Police Chiefs' Council's diversity, equality and inclusion committee, said: 'I welcome the clarity that the decision at the Supreme Court has provided and we will be reviewing our policies and procedures in accordance with the outcome.
'We will need time to consider the full implications of the court's decision, as will many other public bodies.'
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