From 1h agoAndy Burnham's new government faces questions on funding after announcing £2 bus fare cap in EnglandGood morning and welcome to our live coverage of UK politics.Andy Burnham’s new government is facing fresh questions on how it will fund its new policies aimed at easing the cost of living, after the prime minister announced a £2 cap on single bus fares this morning.The cap on single bus fares in England will be in place from January, reducing the current cap of £3. The government said the measure is backed by £454m of funding, including money to allow devolved governments to take similar action. About £400m of that funding will come from switching investment in international climate finance to loans, with the rest from savings in the Department for Energy Security and Net Zero budget.Prime minister Andy Burnham at his first Cabinet meeting at Downing Street on Tuesday. Photograph: WPA/Getty ImagesIt follows yesterday’s announcement of a cut to VAT on household electricity bills from 1 October, which the government said will be funded by cancelling the digital ID scheme. But former cabinet minister Darren Jones suggested the scheme was “unfunded” and said the government “will have to set out how it will pay for its new policies at the budget”.When posed this question on the bus fare cap, transport secretary Heidi Alexander said she was “100% sure” the new policy was fully funded, saying the government was “reprioritising spending”.“The prime minister has been absolutely clear that we’re going to observe the fiscal rules and that you won’t get any unfunded spending commitments from this government,” she told BBC Radio 4’s Today programme.She also insisted the cut to VAT on domestic electricity bills was properly financed, telling BBC Breakfast that it was “not true to say the money isn’t there to implement the changes on electricity bills”.She criticised Jones, who was sacked as the Duchy of Lancaster, for questioning how new government policies will be funded on social media, telling Sky News she was “not sure it was either the most timely or wise tweet that Darren has ever put out”.Conservative shadow chancellor Mel Stride said the government could not answer the question: “Where is the money coming from?” Speaking to BBC Breakfast, he said there was not any money to be saved from scrapping the digital ID scheme because “it was never funded in the first place”.Key events10m agoBoost for Burnham as UK inflation drops by more than expected1h agoAndy Burnham's new government faces questions on funding after announcing £2 bus fare cap in EnglandBoost for Burnham as UK inflation drops by more than expectedPhillip InmanUK inflation dropped by more than expected in June to 2.6%, in a boost for Burnham’s plans to reduce the cost of living.The new prime minister has pledged to bring down the cost of living to give households more disposable income and improve the outlook for the economy, announcing a winter VAT cut on electricity bills and lowering the cap on bus fares in England.Last month’s consumer prices index reading outdid economists’ forecasts of a slide from 2.8% in May to 2.7%, amid a fall in the prices of fuel, particularly diesel, helped by the unstable truce in the Middle East conflict.The Office for National Statistics said clothing also dropped in price month on month along with the cost of transport and food, offsetting modest price increases in most other goods and services.Grant Fitzner, the ONS chief economist, said: