England Bus Fares to Be Capped at £2 as Burnham Reverses Increase

The bus fare cap in England will revert to £2 from January, the new prime minister Andy Burnham has announced, reversing an increase introduced under his predecessor.

The government says the policy, expected to cost more than £500m, will "help with the cost of living and give people the breathing space they need". The new cap takes effect from 1 January 2027 on participating buses outside London.

In January 2025 the England-wide cap rose to £3 under Sir Keir Starmer's Labour government, although some city regions — Liverpool and Manchester among them — held fares at £2 using their own funding.

Burnham said affordable transport links were an essential rather than a luxury, adding: "Lower fares will help people get to where they need to." Transport secretary Heidi Alexander told the BBC's Today programme the measure gives people "a little bit of hope" at a time when many are grappling with higher living costs, particularly after fuel prices spiked as a result of the US-Iran war.

The government said returning to a £2 cap should particularly help passengers in rural and coastal areas, where single fares tend to be higher and where alternatives to the bus are limited.

The policy has a long lineage. The previous Conservative government capped single fares in England at £2 in January 2023, in a scheme initially due to last three months that was repeatedly extended. Burnham himself introduced a £2 cap as mayor of Greater Manchester in September 2022, funded at that point by central government. The original subsidy applied outside London, with bus operators taking part voluntarily, and was intended both as a cost-of-living measure and as a way to bring passengers back after the pandemic.

The evidence on its effectiveness is mixed. The Office for National Statistics said the cap played a role in reducing inflation in 2023, and it was broadly popular. An evaluation of the first ten months — not published until 2025 — found the scheme contributed 5 percentage points of the 13% rise in bus usage over that period, with lower-income passengers seeing the greatest financial benefit.

It scored less well on value for money. How much any individual saved depended heavily on what local fares had cost beforehand, meaning the subsidy delivered very different returns in different places. In those first ten months, £210m was spent against a £245m budget.

Even with fare capping, passenger numbers have not fully recovered from the pandemic. By March 2025, 1.9 billion journeys were made on local buses in England outside London, around 93% of pre-pandemic levels.

Shadow chancellor Mel Stride said the government has not specified where the money to fund the cap will come from.

Reported from the BBC.