Bus fare cap to be raised to £3 as Keir Starmer warns of 'unprecedented' economic challenges ahead of Budget
28 October 2024, 13:03
Millions of Brits are facing bus fare hikes after Keir Starmer confirmed that the cap will be raise due to "unprecedented" economic challenges.
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The PM confirmed that the cap on fares will go up from £2 to £3 until the end of 2025.
It will come as part of the government's bid to fill a £22 billion "black hole" in public finances at this week's Budget.
Delivering a speech in Birmingham on Monday, he said he knows "how much this matters", particularly to people who live in rural communities.
"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," Sir Keir said.
"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."
Sir Keir also said that the Chancellor will announce £240 million in funding for local services to help get people back to work when she delivers her fiscal statement in two days.
It will mark a "moment of pride" as Ms Reeves becomes the first woman to deliver a Budget, he said.
Read more: Chancellor Rachel Reeves set to raise inheritance tax in upcoming Budget raid
Sir Keir has hailed the Budget as one for "working people", sparking growing questions over the definition.
Labour pledged in their manifesto not to increase taxes on working people - ruling out a rise in VAT, national insurance and income tax.
"Trust in my project to return Britain to the service of working people can only be earned through actions, not words," the PM said.
"Change must be felt. But every decision that we have made, every decision that we will make in the future, will be made with working people in our mind's eye, people who have been working harder and harder for years just to stand still.
"People doing the right thing, maybe still finding a little bit of money to put away, paying their way, even in the cost-of-living crisis.
"But who feel that this country no longer gives them or all their children a fair chance.
"People stuck on an NHS waiting list, whose town centre is blighted by antisocial behaviour, who can't afford to buy a place that they can call home, or can't afford the home they have because of the mortgage bombshell."
Sir Keir said the UK must face the "harsh light of fiscal reality" as he warned of "unprecedented" economic challenges.
He pledged to "ignore the populist chorus of easy answers" - seeming to pave the way for tax hikes including a rumoured increase to employer national insurance contributions.
Read More: Government to cut Right to Buy discounts at Budget to boost council housing
"We have to be realistic about where we are as a country. This is not 1997, when the economy was decent but public services were on their knees," he said.
"And it's not 2010, where public services were strong, but the public finances were weak. These are unprecedented circumstances.
"And that's before we even get to the long-term challenges ignored for 14 years: an economy riddled with weakness on productivity and investment, a state that needs urgent modernisation to face down the challenge of a volatile world."
The Labour leader said that he won't offer UK economic woes "as an excuse" - adding that he expects "to be judged on [his] ability to deal with this".
He went on: "Politics is always a choice. It's time to choose a clear path, and embrace the harsh light of fiscal reality so we can come together behind a credible, long-term plan."
Despite the tight financial picture, Chancellor Rachel Reeves pledged £1.4 billion in next week's Budget to fix crumbling schools and triple breakfast clubs.
But education unions have said that more money is needed.
The Chancellor said that children should not suffer because of the parlous state of Britain's finances, including a widely trailed multi-billion-pound 'black hole' of overspend.
Some economists cautioned that most of the funding announced on Sunday would be enough only to keep existing initiatives going.
The Treasury said the £1.4 billion would "ensure the delivery" of the school rebuilding programme, which was announced in 2020 and aims to rebuild or refurbish about 500 schools in a decade.
The scheme seeks to carry out construction projects at a rate of about 50 a year but the government last year forecast that it would complete fewer projects than initially planned, according to the National Audit Office.
