Tiered citizenship already exists, though.
The UK would strip me of citizenship & pack me back if I did something horrible; I bet that can't happen to native-born (at present). My original country citizenship is my birthright which I was able to pass to DC, but easily could be stripped off my DC if they did anything to piss my original govt. off enough.
That's leaving aside things like people with residency permits/leave to remain/green cards and their twilight status.
so this is just an extension of existing differences -- if the policy is interpreted as suggested
Funny how this has focused on council housing; I am fairly sure that it's something few immigrants can get their head around, anyway. We unusually come from countries with unimpressive welfare states, we can't really think in about entitlements so easily. I always think of myself going homeless if I lose everything, can't get my head around the idea that the govt. would just house me.
There was a big radio 4 programme recently about nationhood; part of what they were saying is how the nationstate is a very modern development, as is the idea of citizenship. I suppose citizenship is still evolving and it wouldn't surprise me if tiered citizenship became a new normal model in next century or so (not just in UK, in lots of places).