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"It will cut a swathe through the massive complexity of the existing benefit system and make it less bureaucratic to run. And by utilizing the best data technology available, we will streamline the system to reduce administration costs and minimize opportunities for fraud and error," he added.
He justified the huge scale and ambition of the reform. "With 5 million people trapped on out-of-work benefits and almost 2 million children growing up in homes where nobody works, we cannot afford to simply continue tinkering around the edges of the welfare system. Only root-and-branch reform will do."
A department for work and pensions (DWP) official said greater simplicity will lead to administrative savings of more than 500 million pounds (about 805 million U.S. dollars) per annum. The official added that it was expected 2.5 million people would be better in the new system.
The financial rewards for entering work will improve, particularly for those on low earnings, because under the current system people who work longer than 16 hours would be taxed at around 96 percent -- under Universal Credit around 900,000 people who already work 16 hours a week would be taxed at around 76 percent.
The reform is the principal part of the coalition government's key task -- to reduce public spending.