Economy · ArchiveBurnham's £2 Bus Cap Paid by Cutting Climate Aid to Developing NationsAired July 22, 2026 at 8:01 AM UTCWritten September 7, 2026 at 9:22 PM UTCRead the write-upThis storyTranscript · LOADING0:00Prime Minister Andy Burnham unveiled his0:02latest cost of living pledge today,0:04capping single bus fares across England0:06at £2 starting January 1st, 2027. The0:09scheme costs more than 500 million0:11pounds a year and is meant to help0:13families squeezed by transport costs.0:15But a closer look at the government's0:16funding plan has sparked a very0:17different debate about who actually pays0:19for those cheap rides. The fare cap0:21applies across all of England outside0:23London from January 1st through the end0:25of 2027. The total price tag more than0:28500 million pounds for that one year.0:31The government says it is fully funded0:33through departmental savings, but the0:34details reveal a significant trade-off.0:37Of that total 400 million pounds comes0:39from converting international climate0:41aid grants into loans within the0:42Department for Energy Security and Net0:44Zero budget. Only 100 million is drawn0:46from the DfT bus budget and other0:48departmental savings. Here is why the0:50grant-to-loan switch matters. Under OECD0:52rules, turning a grant into a loan0:54counts as a reduction in aid spending0:56because recipient countries now have to0:57repay the money. So, the government has0:59effectively cut international climate1:01aid by 400 million pounds to fund1:03domestic bus fares. Chancellor John1:05Healey insists the policy is funded by1:07savings found elsewhere and carries no1:09burden to British taxpayers. Shadow1:11Chancellor Mel Stride counters that the1:13government has not specified where the1:15money actually comes from, adding that1:17the loan conversion adds to near-term1:19borrowing. This comes at a time when UK1:21aid was already at its lowest point1:23since 2008. It had been cut from half a1:26percent of gross national income to just1:270.3%.1:29Foreign Secretary Yvette Cooper has now1:31confirmed that bilateral aid to several1:33countries will be significantly reduced1:35as a result of this grant-to-loan1:36switch. Campaigners argue the move1:38weakens the United Kingdom's climate1:39leadership on the world stage. By1:41turning grants into loans, the1:43government saves money in the immediate1:44budget, but the burden shifts to1:46developing nations that lose grant-based1:48financing for climate adaptation and1:50renewable energy projects.Explore with HeyDexThe shortThe short ↗