The situation is virtually the same then and now. Huge demands on the public purse, which exceed the incoming revenue.
The cost of operating a bus service is a known figure. The only question is how much of that cost should be met from the public purse and how much of that cost should be met from the private purse.
But in the most basic terms this is a zero sum calculation. Farepayers are taxpayers. Taxpayers are farepayers. Ultimately the same person is paying for it.
Reducing the price cap from £3 to £2 costs the public purse an extra £1 but puts an extra £1 back into the private purse. That £1 can (indeed, given the demographics of bus users, probably
will) then be spent elsewhere within the economy. Most of that £1 will likely end up back with the public purse as a result of that additional economic activity anyway.
It is interesting that it is only this type of expenditure that is classed as "subsidy." Filling potholes on a main road is not seen as "subsidy." Building a new road is not seen as "subsidy." Entirely correctly, that expenditure is seen as stimulating economic growth. New roads are always sold on how much extra money it will generate for the local economy by cutting congestion, speeding up journey times, etc etc. It is a constant source of annoyance to me that similar types of investment in public transport is never described in the same terms.
This is why I consider the idea of "subsidy" being "unaffordable" to be a complete red herring.
So a fare capped at maybe £4 each way still gives big savings against the commercial bus fare, comparable train fare or cost of driving (especially if you have to pay for parking), it doesn't have to be quite as cheap as £2 to still be very good value but also reduce the cost of the scheme a bit and give people a sense that it is fairer.
That depends on your perspective, though.
Labour have always had an issue in rural communities where those communities consider themselves ignored by the city dwellers. By their very nature, rural areas are served by longer-distance bus services. Rural poverty remains a very significant and serious issue. It is no coincidence that the constituencies Reform UK won at the 2024 General Election were rural and semi-rural areas like Skegness, Great Yarmouth, and Sutton-in-Ashfield.
So is it fair that those city dwellers get to benefit from a £2 fare cap when they get the bus to the supermarket or the hospital, but rural dwellers end up with a fare cap which is many multiples of that? It's easy to look at, say, York to Hull, and go "oh it's a long way, the train is more expensive, the bus cap is unfair." But that completely disregards the people who live in the intermediate towns, people who would otherwise be told that because they live in a rural area they have to pay £10 to get to the nearest hospital by bus rather than the £2 charged to someone who lives in metropolitan Hull.
Take somewhere like Mablethorpe as an example, the nearest A&E is in Lincoln or Grimsby. Sure, the bus cap will also be used by people going to the seaside for the day, but to dismiss it for that reason ignores the people who live there.
So it depends how you want to define fairness, really.