I think Rishi Sunak is seriously and crudely simplifying a complex and nuanced issue for political capital, as many politicians are unfortunately inclined to do to appeal to voter bases (one of the shortfallings of lobbying and funding in electoral democracies).
Biological sex or genotype undeniably exists and comes with reproductive, neurochemical and social consequences for the resulting human being, but so to does phenotype and neurotype.
In most people, chromosomal, phenotypical and neurotypical sex all align in a male/man/masculine or female/woman/feminine way, albeit with innumerable individual characteristics, quirks and variables based on person, context, upbringing, environment and choices.
However, there has always been throughout history and in every society and will always be a significant minority of what we now call transgender and intersex people for whom that neat alignment does not occur.
Thus, you might have a biological male with XY chromosomes who has androgen insensitivity and due to lack of exposure to androgen in the womb develops and is born with a female phenotype, including vagina, clitoris and who will develop breasts upon puberty. Most of these individuals are, will identify as and be socially accepted as women.
Or you might have a biological female with XX chromosomal type and who develops with female hormones in the womb as a phenotypical woman yet after birth, grows up and it becomes evident that the person has the neurotype of a man and consequently identifies as a man in gender. And so on and so forth with so many other variables in a significant minority of the human populace.
Human beings are complex. For many of us, it is quite simple- but not for everyone by any means.