What is racism? When does it start, and under what conditions?

Here in England racism is getting worse and worse and I don't think it is helped by our useless government which we have in power at the moment. The constant influx of illegal immigrants and asylum seekers who enter our country and are given free hand outs is a massive fuel for the fire in this country. The government wants to eradicate racism but it's going about it all the wrong way. By handing out taxes which british citizens who have lived here all our life have earnt the hard way through skrimping and saving; working all the hours god sends just for the government to steal it in meaningless tax and reward those who have just entered our country with not a penny to their name. It just doesn't seem fair! I'm not a racist but I can seriously see why people would turn this way. Of course I can't comment too much on other countries as I am not a resident their. Something needs to be done to eradicate this problem I agree but something fair that won't antagonise others.