Universities will be fined if they hand out too many first and 2:1 degrees to be fair to “hard-working students”, the education secretary is threatening.

Damian Hinds said a big leap in the two top awards – to 78 per cent of degrees, up from 67 per cent at the start of the decade – amounted to “grade inflation”, rather than rising standards alone.

Branding it “unjustifiable”, he said new powers to fine universities up to two per cent of their income for failings should be extended to include baseless grades.

“It cannot be right that students in one year are awarded higher grades for the same level of achievement than those in previous years,” Mr Hinds said.

“We owe it to the hardworking students who have earned those top grades to stamp out this unfair practice.

“I expect the Office for Students – when they have their full range of powers – to challenge those institutions that record an unjustifiable rise in the proportion of top degrees being awarded.”

Top 10 universities 2019 Show all 10 1 /10 Top 10 universities 2019 Top 10 universities 2019 10. University College London Down 3 places on last year in the Complete University Guide rankings Getty Top 10 universities 2019 9. University of Warwick Down one place on last year in the Complete University Guide rankings Jez Sutton Top 10 universities 2019 8. University of Lancaster Up one place on last year in the Complete University Guide rankings Rwendland Top 10 universities 2019 7. Loughborough University Up 3 places on last year in the Complete University Guide rankings Top 10 universities 2019 6. Durham University In the same place as last year in the Complete University Guide rankings Getty Top 10 universities 2019 5. University of St Andrews Down 2 places on last year in the Complete University Guide rankings Getty Top 10 universities 2019 4. Imperial College London Down 3 places on last year in the Complete University Guide rankings PA Top 10 universities 2019 3. London School of Economics Up one place on last year in the Complete University Guide rankings Getty Top 10 universities 2019 2. Oxford University In the same place as last year in the Complete University Guide rankings Getty Top 10 universities 2019 1. Cambridge University In the same place as last year in the Complete University Guide rankings Getty

The education secretary pointed to analysis published by the Office for Students (OfS) last December, showing that 27 per cent of students obtained a first-class honours degree in 2016-17, up from 16 per cent in 2010-11.

The proportion was strikingly higher at some institutions, including the University of Surrey (50.1 per cent) and the University of Huddersfield (37.9 per cent).

The department for education said the analysis had concluded a rise of that scale could not be attributed to higher attainment at school or changes in student demographics alone.

Mr Hinds said British universities enjoyed a global reputation for “quality and high standards”, adding: “Unjustifiable, artificial grade inflation threatens that.”

However, the president of Universities UK, which represents higher education institutions, insisted they were already “determined to tackle unexplained grade inflation”.

“We recognise it is crucial that we keep the confidence of students, employers and the public, in the value of a university qualification,” said Dame Janet Beer.

“It is important to draw a distinction between grade inflation and grade improvement, where increased investment in teaching and facilities, as well as students working harder than ever, are leading to legitimate increases in grades.”

The statutory powers of the OfS will be strengthened by new regulations to be laid in parliament later this year, allowing the body to levy fines of up to £500,000 or two per cent of a university’s income, whichever is higher.

Universities found to be damaging students’ interests face fines, extra conditions on their registration, or – in the worst-case scenario – the removal of the right to award degrees.