Bus fare cap to rise to £3, says Prime Minister
Media reports that the £2 fare cap could be cut in Wednesday’s Budget have been defused by the Prime Minister’s announcement today that the fare cap will rise 50%, to £3.
Costing £200m, the fare cap has seen passenger journey rise almost 20% between March 2022 and March ’23, delivering between 70p and 91p in social benefits, according to one official DfT report. Now, Sir Keir Starmer has announced that the fare cap will be increased but will remain, recognising its value to rural communities in particular.
Speculation over the fate of the fare cap had swirled for a number of weeks as the 31 December 2024 deadline for the end of the current arrangement neared.
“We are pleased that the government has taken steps to implement a managed exit from the £2 fare cap in line with our proposals,” said Confederation of Passenger Transport CE, Graham Vidler. “While it will avoid the dangers of a cliff edge at the end of this year, an increase to £3 will still present challenges for many passengers, particularly those who rely on buses as their primary means of affordable travel
“While it will avoid the dangers of a cliff edge at the end of this year, an increase to £3 will still present challenges for many passengers, particularly those who rely on buses as their primary means of affordable travel” Graham Vidler
“As the new fare cap takes effect, the industry will work closely with government and local authority partners to ensure passengers understand how fares will change and are informed about the range of ticketing options available to help manage travel costs.
“While this increase represents a step toward making the fare cap more sustainable, CPT remains concerned about the potential impact on services if fare changes are not matched with long-term funding. Graham Vidler, Chief Executive of CPT, stated, “The move to a £3 fare cap for one year reflects the government’s intent to gradually transition fare policy, but it must be backed by a consistent funding strategy. Without this support, we risk seeing essential services, especially in rural and underserved areas, become unsustainable over time. Affordable travel should not come at the cost-of-service viability.
“CPT will continue to engage with government and local authorities to advocate for the funding and support needed to maintain and strengthen the UK’s bus network. By aligning fare structures with sustained investment, we can protect essential routes, ensure affordability, and promote a reliable bus network that serves communities across the country.”
Bus & Coach Buyer Editor, Mark Williams, said: “In spending terms, the fare cap has been a bargain, burdening the public purse to the tune of just £200m. This staged increase, while pragmatic, will recover such a tiny amount its effect on, for example, the £102,000m in debt interest the UK is paying would be of no consequence.
“It has been said that the franchising route proposed by Labour would be a more effective way to reduce bus fares. I doubt that the £200m cost of the original fare cap would fund even the first year costs of franchising bus services in a single city. It would be penny-pinching at a time when the National Audit Office says £5.8bn a year is lost each year through tax avoidance.”
Further comment
Commenting on the £2 bus fare cap increasing to £3 in the forthcoming Budget, 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.”
A Transport Focus study designed to better understand the impact of the fare cap found more than one in ten are using the bus to travel more and more than four in ten thought the £2 fare might save them money. Of those taking part in the research, 80% thought it would help people with the cost of living and more than 40% said the bus journeys were replacing ones they would have made by car.
TSSA General Secretary, Maryam Eslamdoust, said it is a mistake to raise the bus fare cap from £2 to £3: “Working people, especially those in rural areas, rely on the buses to get to work. This decision will hit hardest on those struggling the most, the very opposite of what Labour stands for.
“I’m urging the government to change that decision before it’s too late and keep the £2 bus fare cap.”
Silviya Barrett from Campaign for Better Transport said: “We are pleased to see that the Government has avoided fully scrapping the bus fare cap that has successfully increased bus use and benefitted millions of passengers since its introduction.
“Taking the bus should never be a financial burden and while we welcome efforts to keep bus fares affordable, this is a significant increase that could be costly to many. The scheme’s success has proven that by making public transport more affordable, more people will use it and we strongly urge the Government to put a plan in place to keep fares low for years to come. It is vital that the Government now carries out a full review of what other discount fares could replace the cap in the long-term to avoid any further rises.”