The number of hotels used to house migrants will fall by 50 over the next three months, the immigration minister has announced.
Robert Jenrick told MPs that the process of “exiting” the first tranche of housing will begin in the coming days.
In a statement to the Commons, he said the plans were possible because of “the progress we have made to stop the boats”.
But his opponent, Stephen Kinnock, said the announcement demonstrated the government's “absolute lack of ambition” as the figure amounted to a “paltry” 12% of total spending.
Mr Jenrick said on Tuesday: “I can inform the House that today the Home Office has written to local authorities and MPs to inform them that we will now be pulling out of the first asylum hotels, hotels in all four nations of the UK.
“The first 50 of these exits will begin in the coming days and will be completed by the end of January with more installments to follow shortly, but we will not stop there.
“We will continue to implement our strategy to stop the boats and we will be able to get out of more hotels. And as we exit these hotels, we are putting in place dedicated resources to facilitate the smooth and efficient management of this process and limit the impact on local communities.”
In March, the government unveiled plans to house asylum seekers in decommissioned military bases and barges in a bid to cut spending on hotels, which has reached £8 million a day.
That month, around 47,500 people used hotel accommodation, according to the House of Commons Library.
Some migrants were taken back to the barge Bibby Stockholm in Portland, Dorset, after Legionella bacteria was discovered in the water supply which led to an evacuation in August.
Mr Jenrick said the 500-person ship had reached about 50 people on October 23.
Another government plan announced in April 2022 to send some asylum seekers to Rwanda is currently held up in the courts, with a deportation flight yet to take off.
Shadow Immigration Secretary Mr Kinnock accused Mr Jenrick of having the “brazen neck” to announce not that the Government had reduced the number of hotels, but that it was “just planning, and by a paltry 12%”.
He also questioned whether the hotels selected for the first installment of the “exit” are in marginal locations, as some reports have previously suggested.
“Does he really think the public might not see through this ruse?” Mr Kinnock said, asking if the Government would publish a list of the names of the 50 hotels.
“He sounds like an arsonist who burned down our house and expects us to thank him for throwing a bucket of water on him.”
Mr Kinnock pointed to the weather accusing the Conservatives of failing to do well in their bid to stop shipping across the Channel, saying voyages were continuing despite the summer of 2023 being the “wettest since 1912”.
Mr Jenrick joked in his response: “Every time I come into this room it's the weather. The honorable gentleman is becoming the Michael Fish of British politics – he always gets the prediction wrong.'
He confirmed that a hotel in Labor MP Sir George Howarth's Knowsley seat, which was at the center of disorder earlier this year, is among those in the first tranche.
A police van was set on fire and rockets fired at officers after a demonstration outside the property, which Jenrick said “highlights why this is not an appropriate form of hospitality”.
The immigration minister described the plans as a “landmark” but not enough” and not a moment for “triumph”.
Conservative MP Natalie Elphicke, whose seat is often visited by migrant boats in Dover, praised the government for what she described as “tremendous efforts” to tackle the issue.
Mr Jenrick replied: “Although significant progress is being made today, and certainly very significant progress compared to what we see in other European countries, it is clearly not enough.
“Her constituents want us to stop the boats altogether, and that's what we intend to do. So today is not a day of triumph, it is a milestone.
“Tomorrow we'll be back to work and back to stopping boats.”
Some 26,501 people have gone ashore after the perilous journey across the Channel since the start of 2023, which compares with more than 37,000 by this point last year.
The Refugee Council warned that the reduction in hotel numbers could be a factor in what it described as a growing “homelessness crisis” among migrants.
Chief executive Enver Solomon said: “The cost and chaos of an out-of-control backlog of asylum is a result of massive government failure that has left people stranded for years.
“While closing hotels, we are now seeing a homelessness crisis develop with newly recognized refugees being given just seven days before being evicted from accommodation.
“Rather than being a moment of celebration, receiving refugee status is, for too many, currently a ticket to homelessness with the cost being passed on to councils.”