Chancellor John Healey has issued a tax promise after announcing the Government's new £2 cap on bus fares, stating the change will not place any additional burden on taxpayers.
Fare reduction details
The nationwide scheme, due to begin in January, will reduce the maximum single bus fare from £3 to £2, cutting the cost of many journeys by a third. Backed by £454 million in funding, the policy is expected to benefit millions of passengers, including commuters, students and families struggling with rising living costs.
Speaking after the announcement, Mr Healey said the initiative would be paid for through savings made elsewhere in government rather than through higher taxes or increased borrowing.
"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," the Chancellor said.
Funding sources
The Government says around £400 million of the funding will come from changes to international climate finance, with the remaining money found through savings within the Department for Energy Security and Net Zero.
Prime Minister Andy Burnham described the fare cap as a practical way to help households facing financial pressures, arguing that cheaper public transport would make it easier for people to travel to work, education and essential appointments.
Wider strategy
The measure also forms part of the Government's wider strategy to encourage greater use of public transport, reduce congestion and improve air quality. Ministers hope the lower fares will persuade more people to choose buses over cars while helping local economies by making travel more affordable.
The announcement comes alongside other measures aimed at easing the cost of living as the new administration begins setting out its economic agenda. With inflation falling to 2.6 per cent in June, the Chancellor said the Government was determined to build on that progress while ensuring support for households remained fiscally responsible.
The £2 fare cap is expected to be introduced across England from January, with further details on participating operators and eligible routes due to be released before the scheme comes into force.
