No, gosh no. It is your house, after all. This Ben guy sounds like a complete idiot, and your brother sounds like one too if he has said that he is going to move out if you don't let his friend move in.
What's wrong with him? Geesh. If this Ben guy is upset/defensive/angry now, imagine what he would be like if he moved in!
I'm not trying to make you say no or anything, but if I was in your position, that's what I would do. I'd tell him that sorry but you already have enough people in your flat. First in, first serve, I guess.