Rachel Reeves has sparked fury by extending the £3 cap on bus fares until 2027. The Chancellor is expected to confirm the extension of the cap beyond 2025 at Wednesday’s spending review. Paul Kohler MP, Liberal Democrat transport spokesman, said: “Household budgets are still really feeling the squeeze, so many will be really disappointed to see that the Government is moving to make the bus fare hike permanent. This will hit those who rely on public transport to get around to their local high street or to work and school in the pocket. People have been telling them they got this wrong, but Labour clearly isn’t listening.

“Meanwhile, vital local bus services are in a death spiral, with rural communities particularly badly hit as routes are slashed. The Government should be heeding Liberal Democrat calls to scrap the bus tax and bring the cap back to its previous level.”

The £3 cap will continue across England until March 2027, it is understood.

The Government has previously said that, without the cap, fares could rise by as much as £12 for a journey between Leeds and Scarborough, or £5.50 for a ticket between Hull and York.

A Treasury source said: “We understand the cost of living is a priority for the British people. That is why we are investing in Britain’s renewal to make working people better off.”

But the Liberal Democrats criticised the decision not to return to the £2 cap that had been in place between January 2023 and December 2024.

The increase in the cap was announced at the budget in October, with the Government arguing the lower rate was not financially sustainable, although some metro mayors decided to fund an extension of the £2 cap in their areas.