The cost of living crisis has taken another turn, as Prime Minister Andy Burnham confirms the reintroduction of a £2 cap on single bus fares across England from January 2027. This significant policy shift aims to ease financial burdens on households, with the government claiming it will "help with the cost of living and give people the breathing space they need".
The move is expected to incur costs exceeding £500 million, but passengers in rural and coastal regions are set to benefit most from this change. The Prime Minister's office highlighted that these areas often face higher single fare costs, making the reintroduction a much-needed intervention.
This isn't the first time England has seen a £2 bus fare cap. Introduced by the previous Conservative government in January 2023 as both a cost of living measure and a way to boost post-pandemic bus usage, it was initially intended for a short duration but eventually extended. The Office for National Statistics found that this scheme contributed to reducing inflation in 2023, with an evaluation published in 2025 indicating it helped increase bus usage by 13% over its first ten months – with lower-income passengers experiencing the greatest financial benefits.
However, the scheme's value for money was not rated highly due to varied savings depending on pre-cap local fare structures. The Labour government has previously increased the nationwide bus fare cap to £3 in January 2025, but certain city regions such as Liverpool and Manchester maintained their £2 fare caps – a policy first implemented by Andy Burnham as Mayor of Greater Manchester in September 2022.
The announcement follows another cost-saving measure revealed by Prime Minister Burnham: a VAT cut on household electricity bills later this year. These initiatives demonstrate the new government's commitment to tackling household expenses, with Mr Burnham pledging during his first cabinet meeting to lead a "cost of living government", aiming to provide Britons with a sense that help is coming regarding their finances.