The new Prime Minister has announced that single bus fares across England will be capped at £2 starting in January. The move replaces the previous £3 cap and is part of a broader effort to make public transport more affordable. It applies nationwide, excluding London.
Manchester already had a £2 cap under former mayor Andy Burnham, while other regions such as Liverpool and the North East have set limits at £2 and £2.50 respectively.
Burnham said that affordable transport is essential and that cheaper fares would give people breathing room to manage living costs. He emphasized that no one should be priced out of essential journeys.
The scheme is estimated to cost £500 million, with funds earmarked for similar measures in Scotland and Wales. The cost is expected to be offset by reallocating climate finance to loans and by savings in the Department for Energy Security and Net Zero budget.
Details of the loan arrangement, including interest rates and repayment terms, remain to be finalized. The Transport Secretary said the details would be worked out in the coming months.
The cap also reverses a 2024 decision by the former Chancellor to raise fares to £3, a move that was later deemed unaffordable.
Chancellor John Healey has highlighted that the fare reduction will benefit millions and that the measure is financed by savings elsewhere, ensuring no additional burden on taxpayers.
Healey also announced a reduction in VAT on domestic energy bills, projected to save households an average of £45 per year.
The funding for the VAT cut has been questioned, with concerns about the absence of identified money for the previously planned digital ID scheme.
The Transport Secretary emphasized that the fare cap will make everyday journeys easier and cheaper for commuters.
Burnham's focus on bus services helped shape his political profile, notably through the launch of the Bee Network, which brought bus franchising under local control.
Critics from the opposition have accused the government of pursuing a historically interventionist economic agenda, citing concerns over higher taxes, borrowing, and extensive state involvement.
Opposition leaders have expressed skepticism about the government's willingness to implement welfare reforms, suggesting limited appetite among backbenchers.
