In his first week as prime minister, Andy Burnham has announced that single bus fares across England will be capped at £2 from January 2027 – reversing a rise put in place by the previous Labour government. The move, expected to cost more than £500m, is part of a cost-of-living blitz that also included a cut to VAT on domestic electricity bills, paid for by scrapping the digital ID scheme.
The nationwide cap, currently £3 until the end of March 2027, will apply to all of England except London. Some areas – including Greater Manchester, where Burnham set a £2 limit as mayor – already have lower top rates. The same £2 cap was originally introduced by the Conservative government in January 2023 as a temporary measure to encourage people back on buses after the pandemic and help with the cost of living. It was extended several times before Sir Keir Starmer’s government raised it to £3 in January 2025, arguing the lower level was not affordable.
“Andy Burnham caps single bus fares at £2 from January 2027, reversing a rise to £3.”
“Good, affordable transport links are an essential,” Burnham said on Wednesday. “No one should be priced out of those and left behind. But for too long people have said that cheaper transport isn’t an option. I don’t accept that. I’ve done it before and I will do it again now: a £2 cap on bus fares for millions across the country.”
The government says the policy will particularly help passengers in rural and coastal areas, where single fares can be higher, and will “give people the breathing space they need” amid the cost-of-living crisis. The Office for National Statistics said the earlier cap played a role in reducing inflation in 2023, and an evaluation of its first ten months – not published until 2025 – found it contributed 5% of the 13% rise in bus usage during that period, with lower-income passengers feeling the most financial benefit.
To fund the cap, the government said £454m will be reallocated from the Department for Energy Security and Net Zero, while around £400m of the total will come from switching investment in international climate finance to loans. Transport secretary Heidi Alexander insisted the scheme was fully funded: “There is £454m of reprioritising money, it’s switch spending. We’re not going to be giving those grants to international climate projects in other countries. We’re going to be making those loans instead, so that money comes back.”
But shadow chancellor Mel Stride questioned the government’s fiscal discipline. “That is a worrying sign, we need to have a government which is on top of the public finances, not one that is making lots of spending commitments without explaining where the money is going to come from,” he told BBC Breakfast.
The cap is set to last throughout 2027, with money also allocated to allow devolved governments to take similar action. Whether it proves sustainable this time – or whether passengers will face another hike – remains to be seen.
