Hi Katrina,
I'm not going to comment on the eligibility of a council home and all of that because I simply don't know how all of that works, and I'm not sure what you plan on doing for Visa stuff either, but I'm assuming since you were planning on going over there in the next few weeks that you've already worked out the logistics of that.
How old is your fiancé?
There is a brick wall inbetween you two at the moment, and that brick wall is a lack of stability, and what he is suggesting is "Well, maybe if you bash your head against it enough, it will come tumbling down!"
And it wont, cause its a brick wall. What he is suggesting doesn't make sense. It's asking for you to sacrifice everything and ask him to do nothing in return. The concept of "It will just work itself out" doesn't always end up as planned, and if it doesn't you're the one who's going to be wondering "what the hell just happened??"
I know it sucks, but you need to put your foot down and say "You need to have income before I come out", and THAT in itself should be enough to motivate him if this is what he's really wanting too, no? (Yes I know the economy sucks over there, and this is especially the case in Manchester from all of the UK folks I've met here in the US. But if HE can't get a job, being a citizen out there with the comfort of family helping him out, how do you think you will fare??)
Sometimes these things need to wait. It sucks, and its miserable, but for the sake of your futures together it just needs to happen. I haven't seen my fiancé in almost a year, and I miss her every single day. We skipped our usual biannual trip to see each other top save up finances for house DIY stuff that is being done now, and for this whole immigration process. It sucks, but now I'm happy I did it, and I'm happy we were smarter then our hearts wanted us to be because we're in the best position possible to make this move happen and be successful with it.
Hopefully things work out, I know its hard but if its something you really want you can make things work, and be smart about it at the same time.
PS. Mean no offense on anything. Obviously don't know your situation completely, so its impossible to walk in your shoes.