Britain’s new Prime Minister Andy Burnham has announced plans to cut single bus fares by up to a third as part of early measures aimed at easing cost-of-living pressures.
Burnham is moving quickly to demonstrate that his government can improve living standards after becoming Britain’s seventh prime minister in 10 years, following a prolonged period of political instability and stagnant wages.
During his first address as the country’s PM, Burnham announced that his government would remove a tax on domestic electricity bills from October 1, saving households about £45 a year. The move to cap bus fares at £2, down from the current £3, will take effect in January.
Although the savings are relatively modest, the measures introduced during his first two days in office are intended to provide what Burnham described as more “breathing space” for households struggling with rising costs.
However, the government faces financial constraints that could limit larger interventions, fuelling speculation that Burnham may raise taxes or increase borrowing at a fiscal event later this year.
Asked whether he planned to increase taxes, Burnham said decisions would be made during the budget, adding that his initial measures focused on reprioritising existing resources to address cost-of-living challenges.
“I’ve made a number of moves that will deal with some of these challenges, although I appreciate there’s a lot more to do,” he told reporters on Wednesday.
Burnham, 56, a former mayor of Greater Manchester, said one of the tax issues under review was the personal tax allowance, which has been frozen since 2021 and has resulted in more people paying tax as their earnings rise.
“We’ll have to look at it at the budget alongside everything else,” he said, adding that there was “no commitment and no unfunded promise” at this stage to increase the allowance.
The government said the bus fare cap would cost more than £500 million, with £100 million coming from the existing transport budget and £400 million from the Department for Energy Security and Net Zero through a decision to convert grants for international climate projects into loans.