Andy Burnham has announced two motoring policy changes that could save drivers up to £68 a year. The new Prime Minister confirmed a VAT cut on domestic electricity from October and a bus fare cap from January.
VAT cut on domestic electricity
Mr Burnham’s first move was to axe VAT on domestic electricity supplies, cutting costs from 5% to 0%. Electric car experts say the decision will reduce bills for EV owners charging at home. David Martell, boss of home charger company Andersen EV, said motorists could save around £25 per year, with higher-mileage drivers saving as much as £40. He added: “For the average EV driver charging at home, the saving on charging alone is likely to be around £20–£25 per year. For higher-mileage drivers, it could be closer to £35–£40.”
Bus fare cap at £2
Bus tickets will be capped at just £2 per journey from January 1, down from the current £3 limit. According to the Department for Transport, those in England made an average of 41 local bus trips per person per year in 2024, with 28 of these outside the capital. With the new £2 fare only in use outside London, the average English bus user could expect to save £28 per year.
Adding up the average VAT savings and bus reductions means that some individuals taking advantage of both discounts could cut their annual bills by as much as £68 a year. Announcing the bus fare discounts, PM Andy Burnham said: “Good, affordable transport links are an essential. No one should be priced out of those and left behind. But for too long people have said that cheaper transport isn’t an option. I don’t accept that. I’ve done it before and I will do it again now: a £2 cap on bus fares for millions across the country. Lower fares will help people get to where they need to – giving them breathing space to help with the cost of living.”
