The UK will stop using hotels to house asylum seekers by the next general election in 2029, according to Finance Minister Rachel Reeves. The move is expected to save the government

£1 billion ($1.35 billion) annually.

Every year, thousands of asylum seekers arrive on the southern coast of England in small boats. Currently, many are placed in hotels across the country—a system that cost the government £3.1 billion in the 2023-2024 fiscal year.

“We will be ending the costly use of hotels to house asylum seekers during this parliament,” Reeves said in a speech outlining future public spending plans.

The growing cost of hotel accommodations, along with local opposition and the impact on tourism, has turned the issue into a contentious political topic.

The Labour Party, led by Reeves, had promised during the last general election campaign to end the use of hotels for asylum seekers in order to save billions but had not previously given a clear timeline.

Reeves explained that ending hotel use would involve increasing funding to reduce the asylum case backlog, speeding up appeals, and deporting individuals who do not have the right to remain in the UK.