Andy Burnham has used his first week as Prime Minister to announce two major changes to roads in England: a reintroduced £2 cap on bus fares and a VAT cut on electric vehicle (EV) charging. The Makerfield MP and Labour leader described the measures as giving households “breathing space” amid ongoing cost-of-living pressures.
£2 Bus Fare Cap Returns
The nationwide bus fare cap will be lowered from £3 to £2 for the whole of 2027, reversing an increase implemented by the previous government under Keir Starmer and Rachel Reeves in 2024. The cap had been set at £3 until the end of March 2027. Some areas, including London and Greater Manchester—where Burnham set a £2 limit as mayor—already had lower top rates for single tickets.
Transport Secretary Heidi Alexander said the change was “about giving people a little bit of breathing space and help with the cost of living.” Speaking on BBC Radio 4’s Today programme, she called it “a signal of intent and shows you the direction of travel of the government under Andy Burnham.” Alexander insisted the scheme was fully funded, noting that “there is £454m of reprioritising money, it’s switch spending.” She explained that the government would convert grants for international climate projects into loans, allowing the money to be redirected domestically.
Burnham himself 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.”
VAT Cut on EV Charging
On Tuesday, his second day in office, Burnham announced an immediate tax cut on EV charging, reducing VAT on electricity used for home charging. The move benefits drivers with chargers on their driveways, lowering the cost of running an electric vehicle. The Prime Minister said: “I said I wanted to give people breathing space, and that’s what I’m announcing on my second day as prime minister. We’re taking immediate action to cut taxes on energy bills, put more money in people’s pockets and bring back hope.”
Alongside the transport changes, Burnham also introduced a VAT cut to energy bills and a 20% cut in business rates for hospitality firms, including small live music venues and pubs. He launched “No 10 North” to accelerate devolution, aiming to “take power down and place it in the hands of people who can use it best”.
Impact and Funding
The bus fare cap and EV VAT cut are part of a broader policy blitz in Burnham’s first week. The £454m reprioritisation for bus fares comes from switching international climate project grants to loans. Alexander confirmed on BBC Breakfast that the scheme is fully funded without new borrowing. The changes are expected to help millions of passengers and EV owners, easing daily travel costs.
