UK Prime Minister Andy Burnham caps bus fares at £2 and cuts domestic electricity VAT

Andy Burnham, newly sworn‑in UK prime minister, announced a suite of cost‑of‑living measures in his first week. Single‑operator bus tickets across England will be capped at £2 from 1 January 2027, lowering the current £3 ceiling. The scheme is funded by an extra £454 million – largely re‑allocated from the Department for Energy Security and Net Zero’s climate‑finance budget – and is expected to cost more than £500 million in total.

In parallel, Burnham’s government will remove value‑added tax on domestic electricity bills from 1 October for six months, a move projected to save the average household about £45 a year. The electricity‑VAT cut is financed by cancelling the planned digital‑ID programme, freeing about £850 million. Burnham also named former defence secretary John Healey as chancellor, signalling a focus on fiscal discipline as public‑sector debt hovers above 95 % of GDP. Early inflation data shows a drop to 2.6 % in June, aided by lower fuel prices, but officials warn the relief may be short‑lived.