Fare subsidies were unaffordable in the 1970s, with both Labour and Conservative governments of the time railing against them.
I don't think we can use the 1970s as the best example.
There is a cost to running a bus service. Either that cost is paid for through the farebox, through taxpayer subsidy, or through a combination of the two. In most cases now it is a combination of the two- adult working-age passengers paying normal fares together with pensioners and disabled people having their fares paid for by the taxpayer.
I don't see how you can say that lower fares are "unaffordable." The cost of running a bus service is being met- where it isn't met, the service doesn't run. The question is whether the cost comes out of a public purse or a private purse.
Lower fares reduce traffic congestion and lower fares attract people into town and city centres for shopping or for leisure. Higher fares do the opposite. We saw that with the low fares policies in the Democratic People's Republic of South Yorkshire in the early 1980s, with the GLC's Fares Fare policy in the mid 1980s, and again under Ken Livingstone as Mayor in the early 2000s. The low fares schemes in London and South Yorkshire in the 1980s were sunk for political reasons, the Thatcherite Conservatives considering something like low-priced public transport as a bit too communist for their liking. Anyone aged over 30 seen on a bus has failed at life, after all.
Given how moribund high street shopping now is, and given how badly the hospitality sector is struggling, my view is that lowering public transport fares is a way of tempting people out of their cars and back into city centres. Has to be better than what we have now, charging people a fortune for public transport and then wondering why everyone stays at home.
There is little gained by subsidising longer journeys which are primarily for leisure.
Again, depends how holistically you look at it.
Lower fares drag people out of their cars. All those people sat on a Coastliner bus paying £2 to go to Scarborough are people not sitting in a car in the A64 car park.
Lower fares give people more money to spend in their destination. All those people paying £2 instead of £12 have an extra tenner to spend when they get to Scarborough. It's a tenner they're giving to the fish and chip shop or the cafe owner or whoever. Multiply that effect for a family. Lower fares probably achieves more than the recent VAT cut for that.
Rural services are inevitably longer distance and rural poverty is a massive issue. These services are already heavily subsidised so, really, the net additional cost of the reduced fare isn't that much. Five people paying £2 or one person paying £10, it's all the same in the end.
But these rural services are also sometimes the ones that are popular with tourists and how do you distinguish? Take the X18 which winds its way up the Northumberland coast from Newcastle to Alnwick and then on to Berwick. Yes, in summer it is full of tourists, but it is also the only bus service and the only lifeline for villages like Craster or Bamburgh.
I'd say the £2 cap is more justifiable than ENCTS...