Fury as £2 bus fare cap faces axe in Budget – that means some face £10 rise

Millions of passengers could face huge bus fare hikes if Rachel Reeves scraps the country-wide £2 cap on Wednesday.

The Chancellor is expected to abolish the cost-of-living lifeline in order to save the Treasury £350million a year. But campaigners warn this would be a disaster.

Worst-hit places could see fares jump by over £10 per journey, with critics saying that scrapping the cap would drive people off public transport. Leaked research at the weekend suggests that every £1 spent on the measure generates between 71p and 90p in benefits. This means it is “not financially sustainable” for taxpayers or bus operators analysis for the Department for Transport (DfT) concludes.

But the Chancellor has been urged to find other ways to raise cash to plug a £22billion gap in public finances left by the Tories. The fare cap – in place across England – is set to expire in December, having been in place since January last year. Ms Reeves has been under pressure to extend it into 2025, with its abolition understood to have sparked a backlash within the cabinet.

Emily Yates, co-founder of the Association of British Commuters, told The Mirror: “This would have a huge impact on rural areas, where fares could jump by £10 or more. Yet, these are exactly the areas that have suffered most due to decades of declining bus services; causing poverty, forced car ownership and social isolation.

“The £2 bus cap was an emergency measure to save bus services from further cuts to routes and decline in ridership, so of course we need to keep it. If anything, we need to see much more money going out to local government to sustain their routes.”

She added that the only long-term solution would be a “bold, nationwide policy to bring buses back into public control and ownership”.

A petition, which has attracted nearly 60,000 signatures, branded the cap a “lifeline”. The plea, backed by the Association of British Commuters, states: “Over the last 18 months, millions of us have been able to travel by bus for just £2 thanks to funding aimed at supporting people with the cost of living.

“It’s been a lifeline to people who rely on buses to get about, and those of us who want to use more public transport to help the environment.”

Meanwhile the Campaign for Better Transport said the £350million saving could be raised by applying VAT to private flights. Polling by More in Common found that 55% of voters think scrapping the cap would be the wrong thing to do. Just 28% said it would be the right decision, with 17% undecided.

Former Tory minister Maria Caulfield said the move was “disappointing but not surprising”, adding: “The £2 bus fare cap that we introduced made a huge difference to making bus travel affordable.”

Last year the DfT said that without the cap, people travelling from Leeds to Scarborough would be shelling out £15 per journey.

Those trying to get from Lancaster to Kendal would pay £14.50, while in the South West it would cost £11.20 to get from Plymouth to Exeter. Other fares that would more than quadruple if the cap was lifted would affect passengers between Newcastle and Middlesborough and Hull and York.

The 2022 National Bus Fare survey found that the average price of a single ticket was £2.47 before the cap came in – but there were large variations across the country. London, Greater Manchester and West Yorkshire have their own fare cap schemes, so would not be affected.

The controversy comes as Ms Reeves gets ready to announce her first Budget on Wednesday. Yesterday(SUN) Education Secretary Bridget Phillipson said working people will not see higher taxes “on their payslip”.

She refused to be drawn on the measures that could be included in the landmark announcement – the first Labour Budget for 15 years. It is already known that the Chancellor will raise the National Insurance rate for employers.

This has sparked a backlash after Labour pledged during the General Election campaign that it wouldn’t raise taxes for working people. It has sparked concerns over the impact it will have on small businesses.

Ms Phillipson refused to say whether a small business owner earning £13,000 a year is a “working person” who should be protected from tax rises. She said: “What I’m saying is that when people look at their payslips, they will not see higher taxes.”

There is intense speculation that people who make money from assets such as property could face higher levies after Keir Starmer said they do not fall within his definition of “working people”.

The Government has ruled out increases to VAT, national insurance, and income tax. A cut to the earnings threshold at which employers pay their national insurance contributions, as well as a hike in the rate of employer contributions, is expected to raise around £20 billion.

But there will be spending commitments as well. Some £1.4 billion has been announced already to rebuild crumbling schools, as well as a tripling of investment in free breakfast clubs, £1.8 billion for the expansion of Government-funded childcare, and £44 million to support kinship and foster carers.