Burnham has lowered the maximum price for bus tickets to two pounds

The new British Prime Minister has introduced a new measure to ease the cost of living: following the abolition of VAT on electricity bills, announced yesterday, Andy Burnham has today lowered the price cap on bus fares across England from £3 to £2.

The measure, which will come into effect at the start of 2027, “will really help people spend less and have more money in their pockets”, said the Prime Minister, emphasising that “it is essential that public transport is reliable and affordable”.

The change does not apply to London, where the long-serving mayor, Sadiq Khan, has long since set a cap of £1.75 on bus fares, but it will help millions of people in the rest of the UK by reducing costs by up to a third in some parts of the country.

The idea of reducing the cost of bus fares – partly to encourage people not to use their cars – is not entirely new, given that the Conservative government had introduced a £2 cap in January 2023. The Labour government led by Keir Starmer had decided that this was too expensive and last year had raised the maximum fare back to three pounds.

The estimated cost of the measure is £500 million a year, which will be covered largely by the ‘reallocation of resources’ from the Department for Energy. In practice, to avoid increasing the national debt, the funds will be raised by converting what are currently grants for international projects to mitigate global warming into repayable loans.