The Prime Minister said the new cap, to be formally unveiled in tomorrow’s Budget, will be in place until the end of 2025.
Sir Keir Starmer announced the change during a speech in Birmingham, in which he also defended looming tax rises and confirmed millions in funding for local services to help get people back to work.
Prime Minister Sir Keir Starmer meeting Chancellor of the Exchequer Rachel Reeves at Downing Street on Monday (Image: Hollie Adams / PA Wire) Sir Keir told the audience: “On the £2 bus fare, first thing to say is the Tories only funded that until the end of 2024 and therefore that is the end of the funding in relation to a £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 2025 because I know how important it is.”
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The rise will be part of Chancellor Rachel Reeves’ first Budget tomorrow, as the government tries to bridge what it has called a £22 billion “black hole” in the public finances but has already been labelled a “bus tax” by one opposition party.
The Budget will also include almost £1 billion of additional funding for local authorities and bus operators to introduce new routes, protect existing ones and make services more frequent.
Stagecoach has welcomed the new £3 bus fare cap (Image: Stagecoach South East) A Stagecoach spokesman said: “We acknowledge the government’s announcement of a new £3 bus fare cap and welcome the clarity it provides.
“We look forward to working with the government to understand the details of the new scheme in the coming days and weeks.
“Our goal remains to provide reliable and affordable transport options that benefit our communities.”
Single bus fares on Brighton and Hove Buses are currently £2 or less until December 31.
Nick Hill, commercial director at Brighton and Hove Buses, said: “Bus plays an important role in connecting our communities, supporting workplaces and enabling economic growth and greater productivity.
“We are pleased to hear that the scheme will continue in the new year under the new government and look forward to hearing more details.”
Silviya Barrett, director of policy and research at pressure group Campaign For Better Transport, welcomed the government not scrapping the cap completely, but described the change as “a significant increase that could be costly to many”.
She said: “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.”
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