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Keeping the £2 bus fare cap in England would only have cost a tenth of the money the government spent on freezing fuel duty, a leading think tank has said.

The cap would have cost £300m compared to the £3bn spent on the fuel duty freeze, according to the New Economics Foundation. Bus fares will instead rise to £3.

The cap was introduced after the pandemic to ease the cost of living crisis for the worst-off households and also to encourage more public transport use. NEF has previously said that frozen fuel duty leads to more driving rather than public transport use, and thus more pollution.

London and Greater Manchester have lower caps. In London, the hopper fare allows unlimited fares for £1.75 made within an hour. Andy Burnham, mayor of Greater Manchester, said he would keep the £2 cap.

Campaigners have asked the Mayor of West Yorkshire to keep the cap. Tracy Brabin said she would consider the plea. The region was the first to bring in a £2 fare cap in September 2022, with the government following its lead in January 2023.

“Access to affordable public transport shouldn’t be down to a regional lottery,” the think tank said.

“The cost of capping bus fares at £2 would have been tiny compared with keeping the fuel duty freeze. We should be incentivizing public transport which would help reduce carbon emissions - rather than continuing with this regressive fuel duty cut.

An extension of the fare cap was announced in 2023 with £300m of funding; £160mto local transport authorities to improve fares, services and infrastructure and £140m to go directly to operators to help protect essential services across England.

Transport secretary Louise Haigh said following the announcement: “Our bus revolution will give every community the power to take back control of their services, end the postcode lottery of services and turn the page on four decades of failed deregulation.”

The Liberal Democrats branded the change a “bus tax” that will hit small businesses and hold back economic growth.

Environment spokesman Tim Farron said: “While this new government has been left to make difficult choices, they cannot allow the burden of fixing the Conservatives’ mess to be on people and small businesses across the country.

“The fundamental issue that neither Labour nor the Conservatives before them seemed to understand is that for rural communities, it doesn’t matter if the cap is £2 or £3 if they don’t have a bus service in the first place.”

Greenpeace condemned Sir Keir’s decision to hike the bus fare cap, saying it “makes no political, economical or environmental sense whatsoever”.

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