Universities failing to increase job chances are charging too much, admits Philip Hammond

Labour will lead a Commons debate on the most recent tuition fees rise on Wednesday

Chancellor Philip Hammond has indicated some universities may be charging too much (Getty)

Philip Hammond has signalled that universities offering poor quality degrees are charging too much, as the row over tuition fees heats up.

The Chancellor said the Government had expected institutions to charge fees at different levels rather than all going for the highest.

It comes ahead of a Labour led Commons debate on the issue, after which MPs will hold a vote on whether to back a further increase on the top level of fees.

Mr Hammond was giving evidence to the Lords Economic Affairs Committee when he said the fees system was being kept under review.

The Chancellor explained: “I do think there's a significant difference between a graduate who leaves university with a, perhaps, quite significant level of debt and a well-recognised degree in an area which is known to provide strong employment opportunities; and a graduate on the other hand who perhaps has a very similar level of debt, but who may not have a degree that is going to enhance his or her employment opportunities in the same way.

“I think we have a responsibility to look at the way the system is working in practice because I think it is probably fair to say the original expectation was that there would be a bigger range of outcomes in terms of fees charged than has actually turned out to be the case.”

As he announced the next Budget will be on November 22, Mr Hammond said criticism of the system had become “more vociferous” as rising inflation had led to nominal interest rates on the loans increasing to 6.1 per cent.

Under Conservative proposals the annual tuition fee cap of £9,000 is to rise by £250 a year, increasing the debt of a student on a four-year course by £1,000 overall.

The Government had attempted to get the rise in student fees through Parliament earlier in the year using secondary legislation, with less scrutiny, but Labour demanded a vote.

The issue was delayed by the election, but now Labour has tabled a special motion to revoke the regulations raising the cap on top-up fees.

The party claimed that the vote would be binding on the Government, but the Department of Education rejected the assertion on Tuesday.

Mr Hammond hit out at Jeremy Corbyn’s plans to scrap tuition fees, saying “it is easy to talk about trying to make this burden disappear but it's not quite so easy to deliver that.”

Shadow Education Secretary Angela Rayner said: “This latest tuition fee rise could cost students up to a thousand pounds more over a university course, yet they are refusing to keep their promise to graduates that the repayment level would go up with inflation.

“Every MP who votes against us on Wednesday will have to answer to the people they represent if they back ever higher student fees and ever worsening terms for graduates.

“In stark contrast, a Labour government would abolish tuition fees entirely and restore maintenance grants.”