The claim that immigrants jump the queue for council houses will be exposed as a myth next week by an exhaustive national survey.
It will undermine Gordon Brown's promise to let local authorities give "more priority" to people with local links in the allocation of empty properties. His move was widely seen yesterday as a response to the suspicion – successfully exploited in last month's local and European elections by the British National Party – that white families were losing out to new arrivals in obtaining council or housing association homes.
The policy, echoing Mr Brown's ill-fated "British jobs for British workers" slogan, brought warnings from the opposition and immigration groups that the Prime Minister was allowing the BNP to set the political agenda.
The Independent has learned that a two-year investigation has failed to uncover "queue jumping" by immigrants and will describe the belief in its existence as a popular prejudice.
The inquiry – based on analysis of authority housing allocation and interviews with housing association managers – was set up two years ago by Trevor Phillips, the chairman of the Equality and Human Rights Commission, and the Local Government Association. Its conclusions will be set out next week. Mr Phillips conceded at the time the inquiry was established that there was a widespread public belief that migrants received unfair advantages.
But research last year discovered 90 per cent of people in council properties were born in Britain. New arrivals in the country represented 2 per cent of the general population, but less than 3 per cent of those in social housing.
New migrants tended to end up in private rented accommodation because many of them, such as Poles and other east and central Europeans, were not eligible for council accommodation as they have not been working in this country long enough to qualify for it. Many lived in difficult-to-let former local authority properties that had been sold, which could have fuelled suspicions that newcomers were being favourably treated.
More than 60 per cent of new migrants were in private rented accommodation, another 18 per cent were buying their own homes and only 11 per cent were in council property, compared with 17 per cent among the general population. Announcing the construction of 110,000 homes to rent or buy over the next two years, Mr Brown told MPs yesterday that the Government was "enabling local authorities to give more priority to local people whose names have been on waiting-lists for far too long".
Downing Street insisted the move was aimed at giving more flexibility to councils. But David Cameron, the Tory leader, warned that ministers risked inflaming tensions with rhetoric designed to react to the BNP's successes. He said: "Government ministers should be very, very careful with the language that they use, that this 'local homes for local people' does not become another 'British jobs for British workers', which I think did a huge amount of damage to the Prime Minister's credibility and helped to build up parties that none of us want to build up."
Mr Cameron said he suspected the Government of deliberately putting potentially inflammatory rhetoric before firm, calm action.
Keith Best, chief executive of the Immigration Advisory Service, said: "The Government is playing to a particular constituency. It won't have escaped the Government's notice that the hard right has been spreading mischief around people to indicate that immigrants are taking their homes and jobs."
Three years ago Margaret Hodge, the MP for Barking in east London, sparked uproar after she called for council house allocation to be linked to length of residence in Britain, citizenship and national insurance contributions. "We should look at policies where the legitimate sense of entitlement felt by the indigenous family overrides the legitimate need demonstrated by the new migrants," she said.
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