Government to restore £2 cap on bus fares in England

The bus fare cap in England will revert to £2 from January, new prime minister Andy Burnham has announced. 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 £2 cap was first introduced in January 2023 under the previous Conservative government as a cost-of-living measure. It rose to £3 in January 2025 under Sir Keir Starmer's Labour government, though some city regions including Liverpool and Manchester kept fares at £2.

The new cap will take effect from 1 January 2027 for fares on participating buses outside London. The government points out the lower cap should particularly help passengers in rural and coastal areas, where single fares can be higher.

An earlier evaluation found that lower-income passengers felt the most financial benefit from the original £2 scheme. The Office for National Statistics said it played a role in reducing inflation in 2023.

It is the second day in a row that the new prime minister has announced cost-saving measures, following Tuesday's VAT cut on household electricity bills.

Gilbert