Grant Shapps: Introduce a £2 bus fare cap to ease cost of living burden

Every bus journey would be capped at £2 to help Britons cope with the cost of living crisis under plans drawn up by Grant Shapps.

In an exclusive article for The Telegraph, included in full below, the Transport Secretary is proposing a £260 million taxpayers’ subsidy to cut the cost of bus journeys that would save £3 on a single ticket for many hard-pressed families.

Mr Shapps said it would provide guaranteed help to families most in need who cannot afford to own a car and are the biggest users of buses for travel.

“The most vulnerable in our society need concrete help in the coming year, measures that make an immediate and tangible difference to daily spending,” he said.

“And a simple way to do this is reduce the burden on those of us who rely on buses to get to work, the shops and the GP. Buses are for all of us, the most ubiquitous form of public transport.”

Mr Shapps is understood to have been working on the scheme since earlier this year to address a long-standing anomaly where bus services in England are more expensive and less frequent than those specific to London, where pay-as-you-go fares are a flat rate of £1.65 if made within an hour.

It was given impetus by the soaring price of fuel, which meant travel by car was being priced out for more Britons. The plan is understood to have been under consideration by Downing Street, before Boris Johnson announced his departure, but faced resistance from the Treasury.

It was being pencilled in to coincide with the huge anticipated rise in the energy cap on heating bills from the current £1,971 to around £3,600 in October. The proposal is likely to be considered by the victor in the Tory leadership contest who is due to be announced on September 5.

The move would mirror other governments across Europe who are slashing the price of public transport. In Ireland, fares have been cut by 20 per cent, while in Germany, a ticket costing €9 (£7.62) gives unlimited travel for a month in June, July or August on local or regional public transport.

City-wide price caps of £2 are also being devised by Labour mayors, including Tracy Brabin in West Yorkshire, Andy Burnham in Greater Manchester and Steve Rotheram in Liverpool City Region. They will begin in the autumn and remain for three years.

In his article, Mr Shapps said the £2 fare cap, lasting 12 months, would apply to every bus journey in England outside London from this autumn and would be “a simple measure that provides some much-needed reassurance deep into 2023”.

With a pre-pandemic annual total of some four billion journeys, bus travel dwarfs rail travel with car-less households making four times as many bus journeys as car owners.

Government data shows that the lowest-earning 20 per cent of the population made 75 local bus trips in 2019 on average, as opposed to 31 for the highest-earning 20 per cent.

“Bus fares across the country vary considerably and can reach £5 for a single local journey. So a potential 60 per cent saving would no doubt be welcome,” said Mr Shapps.

He said a bus fare cap could also generate new business for the sector, with a government-sponsored pilot flat rate ticket scheme in Cornwall already boosting bus use by some 10 per cent since it was introduced.

The price cap will not apply to long-distance scheduled coach services, and nor will it apply to Scotland or Wales.

‘Go anywhere’ flat rate tickets will reduce UK travel poverty

By Grant Shapps, Secretary of State for Transport

We live in uncertain times. Just as the media is reporting on the possibility of drought, wildfires and hosepipe restrictions as the summer heatwave continues, so too is it looking ahead ominously to the approaching cold of winter and the threat of households having to choose between heating and other essentials.

The most vulnerable in our society need concrete help in the coming year, measures that make an immediate and tangible difference to daily spending.

And a simple way to do this is to reduce the burden on those of us who rely on buses to get to work, the shops and the GP. Buses are for all of us, the most ubiquitous form of public transport. With a pre-pandemic annual total of some four billion journeys, bus travel dwarfs rail travel. Buses are the most democratic form of transport but they are used disproportionately by people on lower incomes, many living in rural areas, who find running a car impossible or just too burdensome. For many families, bus fares are part of the core household budget, a cost that must be factored-in to weekly overheads.

Our country’s 30,000 buses provide a lifeline for country communities and an equally vital – and greener – solution for city workers wanting to ditch the car.

It’s time to provide some help for regular bus users and bring them some relief in these tough times. The country is facing a huge challenge from fuel poverty; we must not compound that with travel poverty for the worst off.

So, I propose that we set a £2 fare cap for every bus journey in England outside London this autumn, lasting 12 months. This would inject some certainty into an unpredictable economic landscape, a spending roof that, unlike energy bills, cannot be breached. A simple measure that provides some much-needed reassurance deep into 2023.

Too expensive? Well, a one-year cap would cost the taxpayer about £260 million, a sum far below those being suggested to soften coming energy price hikes.

And it is a targeted measure that brings help to those who need it most, those people who find car ownership beyond their finances. Pre-pandemic figures for 2019 show that households without a car were – unsurprisingly – the biggest bus users, making four times as many bus journeys as car owners. The lowest-earning 20 per cent of the population made 75 local bus trips in 2019 on average, as opposed to 31 for the highest-earning 20 per cent.

Bus fares across the country vary considerably and can reach £5 for a single local journey. So a potential 60 per cent saving would no doubt be welcome.

We as a Government should be thinking all the time about ways to chip away at household costs. It doesn’t always have to be a macro-economic big hit.

A bus fare cap would also generate new business for a sector that, like rail and aviation, saw passenger numbers plummet during Covid. During the pandemic, those four billion bus journeys per year fell to 2.9 billion. More people on the buses means fewer in cars, a win for the environment. Cheaper tickets mean a greener Britain.

And when people are offered a good deal they take it.

A pilot scheme in Cornwall suggests “go anywhere” flat-rate tickets can increase bus patronage. The county is engaged in a four-year, £23.5 million government-sponsored pilot called “Any Ticket Any Bus”. Launched in January, it involves operators accepting each other’s tickets, including a lower-priced day ticket, and tap-on-tap-off technology similar to that in London. Early research suggests bus use has grown by some 10 per cent since its start.

We need to boost public transport by making it the natural choice for daily travel. And to do that we must maintain quality and affordability.

Implementing a £2 cap is a simple way to help the least well-off during the coming difficult year. And it would turn more of us into regular bus users.

It’s a thoroughly good use of taxpayers’ money – not exorbitant but effective. We should do it.