The £2 cap on bus fares will be replaced by a £3 cap from the end of the year, Keir Starmer has announced.

There had been widespread anger over reports Chancellor Rachel Reeves was not planning to renew the cap when the funding expires at the end of this year.

But the Prime Minister said following a speech today that the Budget on Wednesday would include a commitment to keep a cap on bus ticket prices – though one that is 50% higher.

The replacement cap will remain until the end of 2025, he said.

Some passengers were facing fares quadruple the price of their current tickets if the cap was not extended or replaced.

He said: ‘First thing to say is, the Tories only funded that [cap] to the end of 2024, and therefore that is the end of the funding in relation to the £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 ’25, because I know how important it is.’

What is the £2 bus fare cap?

The bus fare cap ensures people in England do not pay more than £2 for a single trip on the bus.

It applies to services across England, but not in London, Greater Manchester or West Yorkshire as caps already existed in those areas when it was introduced to help ease the cost-of-living crisis in 2022.

Research leaked at the weekend showed the measure did not generate as much money as it cost to implement, so it was set for the chop.

David Sidebottom, director at the independent watchdog Transport Focus, said: ‘We know that bus passengers want simpler, better value for money fares and buses provide a lifeline for so many people up and down the country. Our research shows the fare cap is having a big impact in helping more people get around by bus. 

‘While no one likes a fare rise, the announcement of a new £3 cap on bus fares will provide welcome certainty for many people who are struggling and worried about the cost of travel.’

Sir Keir spent much of his speech in Birmingham today preparing the public for a tough Budget in two days’ time, though he continued to insist ‘working people’ would not be hit directly by tax increases.

The PM said: ‘It is working people who pay the price when their government fails to deliver economic stability.

‘They’ve had enough of slow growth, stagnant living standards and crumbling public services. They know that austerity is no solution. And they’ve seen the chaos when politicians let borrowing get out of control.

‘We choose a different path: honest, responsible, long-term decisions in the interests of working people. It’s stability that means we can invest, and reform that will maximise that investment.’

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