In October 2007, a unified Commission on Equality and Human Rights (CEHR) will begin operation in Britain. The Commission will have responsibility for monitoring and promoting human rights and equality on the grounds of gender, ethnicity, disability, age, sexual orientation, transgender status, and religion/belief. As a precursor to the Commission, the Prime Minister established the Equalities Review, an independent, high-level, investigation of the causes of persistent inequality and disadvantage in British society. Its final report, Fairness and Freedom, in February 2007 adopted the capability approach as its measurement framework and recommended that all public bodies use the framework to "agree priorities, set targets, and evaluate progress towards equality" (p.110). In particular, the Review recommended that the framework be used by the CEHR to inform its regular 'state of the nation' report. This paper, and its companion, Definition of equality and framework for measurement: Final Recommendations of the Equalities Review Steering Group on Measurement (CASEpaper 120) were prepared as background papers to assist in the development of the measurement framework for the Equalities Review. The companion paper discusses the key challenges involved in translating capability theory into a practical measurement tool in the context of measuring inequality in Britain in the 21st century. This includes the definition of equality, a procedure for generating and revising a list of central and valuable capabilities, a measurement framework for monitoring trends in inequality, exploring the causes of inequality, and identifying possible policy interventions, and, finally, the types of information and analysis which are required. The current paper focuses in more detail on the need for a list of central and valuable capabilities in terms of which inequality in Britain can be conceptualised and appraised (a 'capability list'). The paper sets out a methodological framework for developing a capability list involving (1) derivation of a core capability list from the international human rights framework; (2) supplementation and refinement of the core list through democratic deliberation and debate. As part of the process of developing a capability list, the Equalities Review commissioned Ipsos-MORI to undertake a deliberative consultation on the development of a capability list with the general public and individuals and groups at risk of discrimination and disadvantage. The paper discusses the results of the deliberative consultation and recommends a capability list based on ten domains of central and valuable capabilities.