Prime Minister Andy Burnham announced that single bus fares across England will be capped at £2 from January, a nationwide measure that will not apply to London. The cap reverses a rise set by Keir Starmer and Rachel Reeves in 2024 and will run through 2027; the existing nationwide cap is £3 until March 31, 2027, while some areas already have lower fares. The scheme is expected to cost more than £500m, with around £400m raised by switching international climate finance from grants to loans, about £50m from Department for Transport funds set aside for buses, and other savings from the Department for Energy Security and Net Zero. Transport Secretary Heidi Alexander said the package is fully funded, citing £454m of reprioritised money and arguing the loan switch returns funds later. Burnham also confirmed a separate cut to VAT on domestic electricity bills that he said will shave about £45 a year off bills from October; former cabinet minister Darren Jones said the money for that VAT cut had not yet been identified. The Trades Union Congress general secretary Paul Nowak welcomed the measures and urged further steps such as taxing bank profits and introducing a social tariff to boost living standards.
Key Highlights
Single bus fares across England capped at £2 from January, excluding London.
Scheme will cost over £500m, with about £400m from switching climate grants to loans.
VAT cut on domestic electricity bills expected to save about £45 annually from October.