Single bus fares across England will be capped at £2 from January, Prime Minister Andy Burnham has announced.
The nationwide cap is currently set at £3 until the end of March 2027 although some areas – including London and Greater Manchester, where Mr Burnham set a £2 limit as mayor – have lower top rates for single tickets.
Mr Burnham said: “Good, affordable transport links are an essential. No one should be priced out of those and left behind.
“But for too long people have said that cheaper transport isn’t an option. I don’t accept that. I’ve done it before and I will do it again now: a £2 cap on bus fares for millions across the country.
“Lower fares will help people get to where they need to – giving them breathing space to help with the cost of living.”
The measure is backed by £454 million of funding – including money to allow devolved governments to take similar action.
Some £400 million of that funding will come from switching investment in international climate finance to loans, with the rest from savings in the Department for Energy Security and Net Zero budget.
The total cost of the scheme is expected to be more than £500 million, with the rest coming from Department for Transport (DfT) funding already allocated to buses.
Chancellor John Healey said “millions of people” would benefit from the measure and has insisted the cap is funded.
He said: “This action to ease the cost of living is funded by savings made elsewhere, so there’s no burden to British taxpayers, just pounds going back into their pockets.”
And Transport Secretary Heidi Alexander said it would make “everyday journeys easier and cheaper”.
“We’re cutting fares by a third to help with the cost of living, open up opportunities and keep people connected to work, school, healthcare and their friends and family,” she said.
The Conservatives introduced the scheme years ago, but in the first 10 months alone, the DfT spent £210 million reimbursing bus firms across the country for the discount.
Labour increased the cap to £3 from January 2025, with Mr Burnham campaigning for lower public transport fares throughout the Makerfield-by-election.
In June, he said: “In an ideal world, I would like to cut the cost of public transport as low as possible.
“I have made it free for 16 to 18-year-olds and recently removed the 9.30am restriction on older and disabled people’s bus passes. I will try to keep the £2 capped bus fare for as long as I possibly can.”