The discussion was held under Chatham House rules. This record, by Fabian Events Director Jessica Studdert, therefore offers a briefing on the broad issues covered in the debate, but without attributing the points to particular contributors who made them.

1) The Hampton Review provided a crucial set of principles which now underpin work at the Treasury. This includes the need for information that is easy to understand, implement and enforce, and regulators that are the right size and scope. Regulation carried out by government departments tended in the past to be internal and process-driven, which made it hard to see outcomes - now there is a good structure for scrutiny, accountability and reviews of progress.

2) The case for better regulation is now well analysed and widely accepted as a central element to a successful business environment. Now that there are clear principles and plans, there needs to be a clear process in place for full implementation. It is not a question of can we make policy better, but can we make implementation better? Risk-based can be done and can work. The Government will soon report progress to date, and there are good examples of risk-based inspections, savings to business and mergers. These best practice cases should enable more of a culture change, within and between government departments.

3) There is still a clear propensity on behalf of the government to regulate, one participant noted, but the worthy cause of this perhaps shouldn't be underestimated – the government is trying to make people's lives better. Regulation is good for business, and the FSA was noted as an example of an extremely effective regulatory regime. It has reinforced the City's role as a financial centre, so regulation can be successfully paired with economic prosperity. It is easier for the FSA to regulate as it is sectoral specific, but it combines desire for prosperity with effective regulation – how can other regulators aspire to this too? Without this it is very difficult to get the rest of the economy right.

4) There was debate between participants about whether the flow of regulation still needed to be addressed. One participant noted that the problem is not with the stock of regulation, as businesses absorb the impact relatively quickly and move on. Rather it is new regulation that is harder to manage. Another participant claimed it would actually be more expensive now to businesses to remove regulation once it is in place, so they just want the stream of regulation slowed down. However, it was noted by another participant that if this is the case, then there is probably no problem with excessive regulation if cost of removing it outweighs the benefits of not having it.

5) In relation to the EU, during the presidency Britain led with the agenda on Europe taking regulation more seriously and having better regulation, not less. One fifth of regulation comes from Europe, probably about one third when national discretion is included. So we need to establish the case for better regulation from the EU and make the argument for a risk-based approach.

6) There were concerns expressed that the debate about regulation is still relatively unsophisticated and frequently reduced to crude rhetoric about red tape. Many business voices complain about bureaucracy, but do not present alternative ideas for reform, and so can be unconstructive. A really important challenge is to conduct a rational, evidence-based debate. Part of that must be a recognition that regulation is crucial to ensuring a degree of equity, fairness and good competition. The question is whether regulation is well framed with appropriate scope and targets.

7) Opinions varied over the use of current methodologies. One participant argued that the distinction between policy and administration costs is difficult to measure. From that, there are generated estimates of total costs of regulation that are meaningless and misleading. Everyone recognises that we must need regulation, we must have rules, so an economy with 0% of GDP regulation would not function. Therefore why should we need to seek an aggregate percentage GDP cost? There is virtually no correlation between percent regulation and economic efficiency. The real question is the type of regulation that enables responsive markets and prosperity, so the real issues are about design and form.

However other participants noted that there needed to be an agreed measurement before improvements can be sought. Targets help 'drive the machine', so while aggregate numbers are crude, the measures serve a purpose. It should be noted that whilst there may be targets to sign up to, there is an intention behind it to look at serious questions, and this enables a more granular analysis. Moreover, the administration and policy cost distinction is crucial from a policymakers point of view. With many policies, for example the minimum wage, the administration can be flexible, but the policy not.

8) The discussion also considered the roles of different stakeholders in the debate. What the risk is, how much for government, citizens, etc, is a critical part of the debate. Central governments are living in the court of public opinion and they will never have an absolute balance and please everyone. Their approach with regards the Hampton Review was an imaginative way of looking at the issue – and highlighted the good and bad practice of different regulators and how they behave. One participant identified a reluctance on the part of the Government to see business as on side as a stakeholder, particularly the new regulation coming from Europe. In this area, businesses form part of efficient lobbying EU-wide and are interested in the same outcomes as government departments. Another participant noted that there were particular costs and impacts on small businesses to consider, but this was difficult as small businesses are disparate, and have many different interests.

9) However, another participant argued that the national debate is framed within a business bias, with too little focus on the consumer. In fact, the need for regulation comes about because of lack of good business practice – corporate responsibility is key to the debate. Linked to this, another participant voiced concerns over the erosion of personal responsibility that results from government going too far to assume risk on behalf of the government. The FSA, for example, is taking steps to alleviate this with its promotion of financial capability, but the question of how to strike a better balance between personal and government responsibility remains. This is part of a broader debate about proportionality, and the right burden for individuals.

10) Regulation must be designed to avoid capture. Not a lot of attention is currently focussed on vested interests who want certain outcomes. For example, energy efficiency companies lobby for their own interests in terms of the products they sell. There should be a much stronger approach to market-based regulation to avoid regulatory capture.

The Fabian Society would like to thank all those who attended, particularly John Healey MP and Philip Hampton for speaking to the Network.

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