Mediocre universities could be penalised if their level of teaching is not up to standard, Jo Johnson has announced.

The Orpington MP and Universities Minister said the Government will reduce the fees of poorly performing universities.

Those which can prove they are excelling will be allowed to increase theirs by £1,000.

As part of a drive to "wipe out mediocre teaching", Universities Minister Jo Johnson outlined a plan that includes allowing the best institutions to raise fees in line with inflation, while penalising those with flagging standards.

Mr Johnson also announced the creation of a new watchdog tasked with rooting out inequality in the system, with universities forced to publish data on their students' backgrounds.

The proposals were first tabled in a White Paper in May, although the minister gave more detail in an article for The Telegraph as the next crop of school leavers received their A-level results.

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"Anyone making the big investment in their future that comes with a degree has a right to expect big returns on it, whichever institution they attend.

"Graduates earn, on average, £9,500 a year more than non-graduates, and will pick up life skills, friendships and confidence that will benefit them for life," Mr Johnson said.

"But there is an unacceptable patchiness that requires our attention and, if we are to make sure our university system retains its world-leading status, we simply cannot stand still.

"In my past year as Universities Minister I've seen our higher education system at its best, driving innovation, nurturing debate and helping everyone, whatever their background, go as far as their talents will take them.

"However, I've also seen troubling signs that the system is falling short of its potential and failing to deliver what students, employers and taxpayers require from it.

"That's why this year I have set out important reforms to the higher education system."