Rachel Reeves has admitted she cannot identify alternative accommodation for Channel migrants despite pledging to end hotel usage within four years.
The Chancellor acknowledged her lack of clarity on replacement housing options during her commitment to eliminate what she termed "costly" hotel arrangements as part of her spending review.
When questioned about where new arrivals would be accommodated, Reeves deflected responsibility to her Cabinet colleague.
Reeves told Times Radio: "Well, I'm not going to be providing accommodation. That's for the Home Office to do.
Reeves placed responsibility on the Home Office to deal with where asylum seekers go
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"But the wasteful spending on the most expensive form of accommodation is a terrible use of taxpayers’ money."
The responsibility for finding solutions has been placed with Home Secretary Yvette Cooper's department.
Overnight reports have suggested the Home Office might be acquiring hotels to continue housing asylum seekers under a different classification.
According to the Guido Fawkes blog, properties in Bristol and Cardiff could be re-designated as "normal" migrant accommodation rather than hotels.
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Such a strategy would enable Labour to technically fulfil its promise to "end" hotel use, while maintaining similar arrangements at considerable expense.
The reports indicate billions could still be spent on accommodation despite the Government's stated intention to eliminate costly hotel usage.
Home Office sources have firmly rejected these claims.
In 2023-24, the UK spent £3.1billion on housing asylum seekers, out of a total asylum support bill of £4.7billion.
The UK has spent £3.1billion on housing asylum seekers
PAReeves told the Commons: "The party opposite left behind a broken system: billions of pounds of taxpayers' money spent on housing asylum seekers in hotels, leaving people in limbo and shunting the cost of failure on to local communities.
"We won't let that stand. So I can confirm today that, led by the work of the Home Secretary, we will be ending the costly use of hotels to house asylum seekers in this Parliament."
Conservative Shadow Home Secretary Chris Philp claimed the plans are "built on an assumption that the hotels magically empty themselves".
He added: "They still have no plan for where these people will go."
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