Bus fares to soar if £2 cap axed, says transport boss

Bus companies are unable to rule out sharp rises in fares if Labour scraps the cap in the upcoming Budget.

The BBC understands that the government is likely to end the £2 fare cap for most bus journeys in England.

The scheme, announced by the previous Conservative government, is due to expire on 31 December 2024.

Bill Hiron, boss of Eastern Transport Holdings, told the BBC's Today Programme he couldn't rule out fares quadrupling.

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"An overnight increase from £2 to whatever it might be is such a big jump that not only will it cause hardship for some people but, of course, it will result in some people saying I'm not going to take the bus anymore," he said.

The Department for Transport and the Treasury have been contacted for comment.

Bus industry insiders have told the BBC that the expectation for the last six months was that the cap would be increased to £2.50 in the New Year and rise again to £3 in March.

A number of bus operators have told the BBC that within the last week, that there has been a strong shift change in the language from the government and that the cap could end.

Chancellor Rachel Reeves is not expected to extend the £2 fare scheme at the end of this year, which could save the government £350m a year.

Whitehall sources say the current scheme does not represent good value for taxpayers.

Privately, one bus operator agrees and says the measure, which was introduced to combat the cost of living crisis would eventually harm the viability of routes and operations – particularly in rural areas.

The BBC has been told that civil servants from the Department for Transport have been locked in negotiations with counterparts at the Treasury.

An announcement is expected during the Chancellor’s Budget on Wednesday.

"It has really helped with the cost of living. We have had some supporters who have saved about £100 a month," said Silviya Barrett, the director of policy and research at Campaign for Better Transport.

"We think there needs to be a full review about what should replace it such as a mix of fare promotions and concessions," she added.

The £2 fare cap was initially brought in for three months in January 2023 but has been extended for almost two years.

One major concern is that fares could rise by up to £10 for some bus users.

"People will forget that they used to pay in some cases £5, £6, £7 for their journey. £2 would have become the normal fare," Mr Hiron said.

"The real fare now for some of those journeys is in most cases higher than it was two years ago."

Mr Hiron said bus users should get more for their money than they did two years ago, insisting bus routes have improved since the cap was introduced and thinks bus reliability "has got better".

Conservative leadership race candidate Robert Jenrick called the prime minister "clueless" and said he "must think people who get the bus aren't working people."

Jeremy Corbyn, former Labour leader and independent MP for Islington North, said the government's decision to scrap the £2 bus fare cap was "disgraceful".

He said that the move would "harm the poorest in society, and discourage public transport at a time when it is needed more than ever," in a post on the social media platform X.