England’s bus fare cap will rise from £2 to £3 in 2025, says Starmer

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People understand tough decisions are needed to fix public finances, PM insists in pre-budget comments



The bus fare cap in England will rise from £2 to £3 at the end of this year, Keir Starmer has said, as Rachel Reeves prepares to raid transport funding in this week’s budget.

The prime minister told an audience in Birmingham that the money to fund the £2 cap would run out at the end of 2024 and that the Labour government would then not be able to keep it at the same level after that.

The decision by the prime minister and chancellor comes despite heavy lobbying by Labour’s elected mayors to keep the cap in place, as revealed last week by the Guardian. Starmer insisted on Monday that working people would welcome such decisions as a necessary part of fixing the public finances after 14 years of Conservative government.

“The Tories only funded [the £2 fare cap] until the end of 2024, and therefore that is the end of the funding in relation to the £2 bus fare,” Starmer said.

“I do know that this matters, particularly in rural buses, and that’s why I’m able to say to you this morning that in the budget, we will announce there’ll be a £3 cap on bus fares until the end of 2025, because I know how important it is. So that’ll be there in the budget on Wednesday.”

It is understood that bus fares in at least one major city will now rise as a result, with local leaders worried about the impact it will have on long-term passenger numbers.

The prime minister was giving a pre-budget speech in Birmingham to set expectations before what ministers warn will be a painful budget for many people, including planned rises to national insurance, capital gains tax and inheritance tax.

Starmer and his senior ministers have spent the last few days defending their plans to increase taxes, despite having promised not to raise national insurance in their election manifesto.

Much of the debate has centred on who counts as a “working person”, given Starmer has repeatedly promised to protect such people. The prime minister sought to reframe that debate on Monday, insisting that working people would welcome “difficult decisions” to fix the country’s economy.

“It is working people who pay the price when their government fails to deliver economic stability,” he said. “They’ve had enough of slow growth, stagnant living standards and crumbling public services.”

He promised this week’s budget would help deliver “better days ahead”, saying: “It is our intention to take the tough decisions upfront, in the here and now, so we can rebuild the country on that stable foundation. You can take from that the tough stuff is coming in this budget.”

But asked whether he could guarantee that taxes would not rise in future budgets, he said: “I’m going to resist the temptation to say that at no point ever will there ever be an adjustment to everything else in the future.”

Many in Labour are concerned, however, that the prime minister’s promises of better times ahead will not be enough to shield them from a voter backlash after this week’s budget.

Richard Parker, the Labour mayor for the West Midlands, introduced Starmer at the Birmingham speech. But Parker is understood to be one of those particularly concerned about bus services, which the combined authority is subsidising by £50m to £70m a year.

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National Express says 'bus fares will rise' in Coventry after £2 cap scrapped by Government



National Express (NX) is set to increase bus fares across the West Midlands as the current Government's £2 cap on single trips ends.

Te £2 fare limit will be lifted from December, allowing bus companies to raise prices beyond this amount. NX, which operates most routes in the region, has already stated it intends to raise its fares.

BirminghamLive was informed by NX that a single journey will go up to £2.90 and while they are "exploring options" for January onwards, the price remains below the new £3 cap announced by officials.

A NX spokesperson explained: "In the West Midlands, outside of the £2 single fare cap, the single bus fare is £2.90, so it is already cheaper than the Government's proposed £3 scheme."

They added, "It is important to note that fares in the West Midlands remain among the cheapest in the country. We are exploring what the options are from January and will update customers as soon as possible.

There's been a significant backlash against the Government's decision to scrap the cap, which was initially introduced under the Conservatives during the cost of living crisis and post-pandemic period. Campaigners have argued that £3 for a one-way bus journey is excessive, although there seemed to be an understanding among ministers and bus companies that maintaining the cap indefinitely would be unfeasible.

Prior to the cap, fares were higher than £2.

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Didn't take them long, did it?

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Bus fares to rise above £3 when cap expires, Transport Secretary suggests



The £3 cap on bus fares is set to be scrapped at the end of next year, the Transport Secretary has signalled.

A universal cap on fares was first introduced by the Conservatives at £2 to encourage the use of public transport after the pandemic.

Labour announced in the Budget that the cap would be raised to £3 next year, sparking concern that the ceiling may be removed altogether. It has emerged that more targeted relief schemes are being considered from 2026 onwards.

Louise Haigh, the Transport Secretary, said that her department had found that the “best approach” was to provide targeted support for young people.

Asked whether the £3 cap would be kept beyond next year, she told Sunday Morning with Trevor Phillips on Sky News: “The plans that we inherited would have ended the cap completely on Dec 31.

“We’ve stepped in with funding to protect it at £3 until Dec 31 next year. And in that period, we’ll look to establish more targeted approaches. We’ve, through evaluation of the £2 cap, found that the best approach is to target it at young people.”

She added: “Just like we do with the concessionary fare for older people, we think we can develop more targeted ways that will better encourage people on to buses.”

Pressed on whether this meant that passengers should expect targeted subsidies on bus fares rather than a single cap, she said: “That’s what we’re considering at the moment.”

Ms Haigh added that the previous cap introduced by the Tories “had not represented good value for money” and that her department’s priority was to improve the “reliability of buses”.

Labour will provide more than £1bn in funding for the bus network in an attempt to calm concerns about a hike in fares and the future of vital routes.

The Government will hand £712m to councils for investment in local services in an extension of the bus service improvement plan (BSIP), which was due to expire in April.

Ms Haigh said bus operators would receive £243m in subsidies to keep fares down and boost frequency.

While every part of England would benefit, the funds would be focused on historically underserved communities, such as small towns and villages, the Department for Transport (DfT) said.

Retaining the BSIP grant, which was introduced under Boris Johnson to encourage people back onto public transport after Covid, will soften the blow of fare hikes.

The BSIP, which to date has provided £1.08bn of funding, has become integral to the survival of many services, according to the Urban Transport Group, which previously warned that without it one in four services could be at risk in areas such as South Yorkshire.

Early morning, late night and Sunday buses are highly dependent on the grants, while two thirds of “socially necessary” routes are fully funded through them.

Campaigners fear that without a cap, local people and tourists will be priced off longer, rural routes, leading services to be axed altogether.

Ms Haigh said the new investment would protect rural buses and increase their use for shopping and commuting, while preventing service reductions on at-risk routes. She said urban areas would be able to maintain high service levels outside the busiest hours. Areas receiving record bus funding include the Isle of Wight, Torbay in Devon, Leicester in the East Midlands and Peterborough in Cambridgeshire.

In addition to the £955m in new funding, the Government has committed £150m to support the £3 cap. Fare increases would be limited to the level of inflation to ensure that not all of them immediately climb to the maximum, the DfT said.

The funding announcement comes ahead of Labour’s Buses Bill, which will sweep away the deregulated system introduced under Margaret Thatcher. Under the new model, local authorities will have the right to take control of their own networks – including bus fleets and possibly depots – and to contract out operations as they see fit.

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Strange, I don't remember any of that being announced in Labour's election manifesto?