Single bus fares across England will be capped at £2 from January 2027, Andy Burnham announced on Wednesday as the new prime minister races to meet a promise to cut the cost of living. Burnham said the measure, lasting 12 months, would reduce prices by up to a third for millions, giving them “breathing space” amid squeezed household budgets.

The government said more than £400mn of funding would be diverted from the energy department, including switching funding for international climate finance projects to loans. Additional cash comes from a transport department pot already set aside for buses. The last Conservative administration had imposed a £2 cap for two years starting January 2023, but Labour argued it was unaffordable. Burnham, then mayor of Greater Manchester, funded an extension in the city region.

The announcement came after Burnham confirmed junior ministerial appointments, including Dan Jarvis returning as security minister, James Murray moving to Treasury as financial secretary, Lucy Rigby returning as economic secretary, and Anas Sarwar stepping down as Scottish Labour leader to become a minister in the Department for Business, Innovation, Science and Trade. Anna Turley appointed Home Office minister, with 17 ministerial reappointments including Stephen Doughty and Luke Pollard.