BRITAIN must overcome a "twin crisis of inequality and identity" if it is to enjoy fair economic recovery, an MP told a York audience last night.

Jon Cruddas, a former aide to Tony Blair, spoke at York St John University last night in the latest Ebor Lecture.

His "Common Good in an Age of Austerity" talk gave an insight into Labour's plans for an "ethical economy" if it wins the next General Election.

The Dagenham and Rainham MP said: "Britain's fragmented identity threatens not only social cohesion. It now threatens our very political unity - reflected in recent elections and future referenda.

"For it appears we no longer know how to define who we are or what we stand for; we are losing our ability to live together, work together or help one another - and indeed to talk about this."

Mr Cruddas said the common good was "about treating people who they really are: as human beings who belong to families, localities and communities."

He called for a "pro business, pro worker and pro aspiration" and said: "the common good promotes the idea of an ethical economy as also the most plausibly successful economy.

"That means a model which combines private profit with public benefit by sharing reward, risk and responsibility amongst all stakeholders: owners, managers workers, consumers, suppliers and members of the local community."

He said putting workers on remuneration committees was one example of that and said: "Such a model requires a rise in productivity to guarantee also a rise in salaries or wages, encouraging a greater sense of pride, duty and genuine calling in every workforce."

Mr Cruddas has been an MP since 2001 and is a policy co-ordinator in the shadow cabinet.

He said furthering the common good requires three big changes, including having locally run and organised schools and hospitals, no more outsourcing of relational services to those parts of the private sector that are driven purely by corporate profit, and to give local authorities greater control over tax revenues to invest and grow their revenues.

This year's series of Ebor Lectures focus on the Morality of Austerity and are held at venues around the city, including York Minster and York Institute for Community Theology.