Cap on bus fares in England will rise 50% from £2 to £3 regardless of fears over impression on poorest

The cap on bus fares across much of England will rise from £2 to £3, Keir Starmer revealed today.

The PM confirmed the detail as he gave a speech teeing up the grim measures in the Budget.

The limit was introduced by the previous Tory government to encourage people to use public transport post-Covid. It applies to services in England outside large cities such as London and Manchester, which have devolved powers over transport.

Critics have warned that a big increase could leave people unable to afford to travel to work, college or hospital, and reduce passenger numbers so drastically it will throw the future of some routes into doubt.

Answering questions at the event in the West Midlands, Sir Keir said: ‘On the £2 bus fare, first thing to say is the Tories only funded that until the end of 2024 and therefore that is the end of the funding in relation to a £2 capped fare.

‘I do know how much this matters, particularly in rural communities where there’s heavy reliance on buses.

‘And that’s why I’m able to say to you this morning that in the Budget we will announce there will be a £3 cap on bus fares to the end of 2025 because I know how important it is.’

Scrapping the cap, introduced by the previous Tory government to encourage people to use public transport post-Covid, could cause rural fares to jump by £10 or more (Stock Image) 

Keir Starmer confirmed the detail as he gave a speech teeing up the grim measures in the Budget

Chancellor Rachel Reeves is expected to impose at least £35billion of tax rises in her first package on Wednesday.

Departments have also been handed tough spending settlements after a series of big public sector pay deals.  

Internal analysis by the Department for Transport has found that the bus fare cap, which costs the Treasury £350million a year, is ‘not financially sustainable for taxpayers and bus operators’.

Officials believe that it generates only 71p to 90p in benefits for every £1 spent to support the cap, which was introduced in January 2023 and expires in December.

However, polling by More In Common has suggested 55 per cent of the public think scrapping would be the ‘wrong decision’.

In North Yorkshire, where bus passenger numbers jumped 11 per cent last year, the cap has been credited with maintaining the viability of a host of rural routes.

The cap applied only to services in England and outside large cities such as London and Manchester, which have devolved powers over transport

Tory MP Richard Holden, a former transport minister, said: ‘Labour are going to hammer car and van drivers, now they’ve revealed they’re going to cripple bus users, too – often younger people and lower paid workers who use buses ten times more than trains. 

‘This is another shameful and cowardly Labour tax on working people, deliberately targeting those who have no other choice.’

Silviya Barrett, the director of policy and research at the Campaign for Better Transport, said the £2 cap had breathed new life into the bus sector and should be extended, not abolished. 

She said: ‘Taking the bus shouldn’t be a financial burden and raising the cap or scrapping it entirely could leave passengers struggling to afford travel on lifeline services.’

The Rural Services Network, which campaigns on behalf of residents of Britain’s 6,000 villages and 200 market towns, said rural poverty has depressed car ownership, leaving people reliant on the bus, many of whom will be left isolated if fares jump or services are cut.