Prime Minister Andy Burnham has announced that most single bus fares across England will be capped at £2 starting next January. This policy aims to alleviate the pressures of the cost of living crisis and is a revival of a measure Burnham previously implemented as Mayor of Manchester.
The new cap is expected to cost over £500 million. The government has stated that £454 million will be allocated through the reallocation of funds, including £454 million from international climate finance redirected to loans and savings from the Department for Energy Security and Net Zero budget. The remaining £50 million will come from existing Department for Transport funding for buses, with provisions for devolved governments to implement the cap.
Despite these allocations, critics, including Shadow Chancellor Mel Stride, have raised concerns about the clarity of the funding sources. Stride stated on BBC Breakfast that it is 'worryingly unclear' where the money will come from, emphasizing the need for government transparency on public finances. The £2 cap will be in effect until the end of March 2027. Currently, a national cap is set at £3, with some areas, including London and Greater Manchester, already having lower single ticket rates.
While the new cap will not apply in London, Mayor Sadiq Khan is introducing a 'Weekend Hopper' ticket for £1.75 during the summer holidays, allowing unlimited bus travel on weekend days.
Burnham stated that affordable transport is essential and should not be a barrier for individuals. He highlighted that his previous £2 cap in Manchester led to an increase in bus usage, though an Office for National Statistics report indicated it did not represent high value for money as many fares were already below £2.
This bus fare initiative follows Burnham's recent decision to remove the 5% VAT rate on household electricity bills, a move he claims will be funded by scrapping a planned digital ID scheme. However, this funding source has also faced scrutiny, with Darren Jones, who previously worked on the digital ID scheme, warning that no funds have yet been earmarked, potentially pressuring future budgets.
The Prime Minister has also stepped back from plans to unfreeze the income tax-free allowance, which has remained at £12,570 for five years. This idea, reportedly costing billions annually, was reportedly dissuaded by advisors. Burnham had previously identified the frozen allowance as a significant concern raised by voters.
Concerns about the affordability of government policies have been a recurring point of criticism. The £2 bus fare cap was a previous policy under Conservative governments aimed at encouraging public transport use after a significant drop in ridership during the COVID-19 pandemic. Labour had subsequently increased the cap to £3 in January 2025.