Gender is listed on all passports issued worldwide that meet International Standards. The use of "X", meaning "Unspecified" as a gender marker is enshrined in the standards, but few countries currently issue new passports with these markers.
An increasing number of people in the UK identify as neither male nor female, or live part time in various gender roles. As well as giving people the ability to identify as they choose and not have the state impose an identity upon them, a perceived mismatch between gender roles and official ID can cause problems dealing with official organisations such as the DWP, Police or Border Agency.
"It is important that the state recognises individuals' identity in a way that is acceptable to them, but the current system of markers on official documentation requires that people chose to identify entirely as male or female. Some countries, in line with international standards, allow 'X' (Unspecified) gender markers on passports and we support the extension of this to UK passports" - Policy Paper 120, p147, passed Autumn 2014.
Liberal Democrat Ministers, MPs and members of the LGBT+ Liberal Democrats executive have been campaigning to allow "X" Gender Markers on Passports since 2010, including securing a review of the current procedures and championing parliamentary Early Day Motions urging a change to the current rules.