Margaret Hodge

The latest research supports the government's case for introducing university top-up fees, the higher education minister has said.

Speaking at a seminar in 11 Downing Street, Margaret Hodge said the government was determined to press ahead with its controversial plans.

The Conservatives have put pressure on ministers by pledging to scrap up-front fees if they win power at the next general election.

Some suggest ministers could make concessions on student support to disgruntled Labour backbenchers when the legislation passes through parliament.

But Hodge insisted that the higher lifetime earnings of graduates who attend elite universities justified not only the existing plans but also theoretical annual fees of up to £7000 at the most exclusive universities.

Research published by the Centre for the Economics of Education found that students' attending elite "Russell Group" universities earn on average between £9000 and £22,000 more after tax and over a lifetime compared to graduates of a "similar" modern university.

"This means that if we assume that a typical full time undergraduate course takes three years to complete, a representative student should be prepared to pay between £3000 and £7000 per annum more to attend a Russell Group university compared to the cost of attending a Modern university," argued Hodge.

She said that as well as offering more freedom to universities, the government's plans were now supported by "an even stronger economic".

"The wool has been pulled over peoples eyes for too long. By asking everyone to pay the same tuition fee regardless of the university they go to we have been implying the benefits of every university are the same. They are not," said the minister.

"By enabling universities to charge differential fees we are lifting the wool from people's eyes, recognising difference, diversity and the premium that some universities can give you over others.

"This is an economic justification for allowing some universities to charge more than others.

"If potential students thought and acted rationally, then they would be willing to invest more in universities that offered them a better return on their investment."

Hodge pledged that access to elite universities would remain a key government priority.

"We are passionately committed to protecting students most in need and to encouraging even more students from non traditional higher education backgrounds to aim higher," she said.

"The new Office of Fair Access will be dedicated to working with all universities who wish to charge differential fees.

"Its existence proves that the economic argument and moral argument need not be mutually exclusive."