LABOUR today pledges to axe university fees and introduce a graduate tax “as soon as possible”, to lift the debt burden on students.

Chuka Umunna, the party’s business spokesman, described the system introduced by the Coalition – of annual fees of up to £9,000 – as an “unsustainable financial mess”.

In an interview with The Northern Echo, Mr Umunna said such heavy fees “throw a huge heap of debt on students”, yet much would have to be written off as unrepayable.

Labour would not be able to go into May’s general election with a promise to axe fees and is, instead, expected to pledge to cut them to £6,000 a year.

But, Mr Umunna said: “We will not be able to go straight to a graduate tax – but getting to it as soon as possible is my priority.”

In the interview, Labour’s rising star also dismissed a plea by a group of North-East MPs for a swing to the Left, insisting Ed Miliband already had policies to “make a real tangible difference to people”.

And he suggested the British car industry – for all its success – should be striving to make vehicle parts, as well as to assemble them, rather than importing those parts.

Labour is widely believed to be about to announce a plan for £6,000 maximum student fees, but has not yet devised a watertight policy to fund the estimated £2.5bn a year cost.

Meanwhile, critics warn that taxpayers face an even bigger bill than before fees were trebled – because graduates will never earn enough to repay close to half of upfront loans.

Parliamentary figures revealed that, for every £1 invested on teaching in universities, a staggering £7.50 is being spent on writing off students' debts.

Mr Umunna said: “In the medium term, a graduate tax is the way to go

“It’s fairer, it’s more progressive and, ultimately, it’s the way you clear up the unsustainable financial mess that’s been created by the Government’s current system.”

This week, Grahame Morris (Easington), Ian Mearns (Gateshead), Dave Anderson (Blaydon) and Ian Lavery (Wansbeck) urged Labour to abandon its “tragic” commitment to further deep spending cuts.

They were among 15 left-wing rebels who issued an alternative election manifesto, also demanding rail nationalisation and stronger trade union and employment rights.

But, Mr Umunna said: “Getting the minimum wage to £8 an hour, banning exploitative zero hour contracts and incentivising employers to pay the living wage - that’s going to make a real tangible difference to people in the North-East.”

“Also, there’s nothing progressive, or social democratic, in spending more on your debt interest repayments as a country than you do on housing, or transport.”

Mr Umunna was speaking ahead of launching a ‘Jobs of the Future’ campaign, to speak to workers, business leaders and young people in every part of the country.