Business and Universities Secretary Cable has confirmed his intention to lift the cap on tuition fees, as recommended in the Browne Review.
Lifting the cap is expected to see fees rise to between £7,000 and £15,000 a year.
In an email to Liberal Democrat and Tory Party members on Saturday, Cable said: ‘A “pure” graduate tax – is not the way forward.
‘While it is superficially attractive, an additional tax on graduates fails both the tests of fairness and deficit reduction.’
However, he added: ‘I am entirely committed to a progressive system of graduate contributions, the details of which we will be able to confirm shortly.’
Cable, who is responsible for business innovation and skills, favours higher earning graduates paying higher interest on their student loans. Many people consider this to be just another version of a graduate tax.
Interviewed on the Andrew Marr Show, Philip Hammond, the coalition’s transport secretary, claimed that ‘It is right that those who benefit from higher education make a contribution to it.
‘And it is right that those who benefit the most by going on to high-paid work contribute the most.’
Hammond added that varying interest on loans could mean ‘those with the lowest incomes have their interest rate effectively subsidised while those on the highest incomes contribute something additional to provide that subsidy’.
Ahead of the Browne Review, some English universities are reported to want to increase fees to more than £12,000 a year.
At the general election, Liberal Democrat MPs, including party leader Nick Clegg and Cable, signed personal pledges that they would vote against any increase in tuition fees.
Cable’s Saturday email highlighted what he claimed were ‘progressive’ elements in the Browne Review, such as making loan repayments more expensive for graduates in higher-paid jobs.
The National Union of Students (NUS) commented that students and their families ‘would not be fooled by any attempt to rebrand the regressive and unpopular system of top-up fees’.
NUS President Aaron Porter said: ‘There is nothing fair about hiking fees and doubling student debt, whilst also increasing interest payments for those who have to borrow the most in order to fund their way through university.’
The University and College Union (UCU) said if the Liberal Democrats’ latest policy shift on university fees led to a rise in the cost of a degree, then voters would never trust them again.
The UCU said Cable’s email ‘does represent a third different position on student funding in just six months’.
UCU general secretary, Sally Hunt, said: ‘The Liberal Democrats campaigned hard at the election against fees, and Nick Clegg warned that increasing them would be a disaster.
‘They cannot now renege on that promise to voters if they wish to retain any credibility.
‘Families who aspire for their children to go to university are not interested in the policy twists, u-turns, coalition infighting or whether the latest idea is called a tax, loan or fee.
‘They want to know if the Liberal Democrats are going to acquiesce in increasing the cost of university. If they do, they will never be trusted again.’
Young Socialists National Secretary Joshua Ogunleye said: ‘Students and their families can’t wait for another election. We must fight to smash fees and restore grants now.
‘That means bringing down this rotten government with a general strike and going forwards to a workers government and socialism.
‘We call on all workers, youth and trade unions to back our march from Manchester to London on October 30 for jobs, free education and a socialist future for all.’