The sad truth is that a lot of 16 year olds leave school, barely able to read properly.
This means that they have not benefited from other subjects on the school syllabus, as you basically have to be able to read to even do maths these days, when what we called "problems" at school - the kind of excercise where you had to read a certain amount of information to tackle the sum in question is exceedingly prevelant.
A pupil with poor reading skills is handicapped in practically every subject, as to study them you need to be able to read the relevant information.
This may be the background for the goverment "telling teachers to concentrate on reading, writing, and arithmetic". I don't know, not having followed the debate.
If my guess is correct, this does not mean that children will in future not be taught anything else, but ought to mean that by the end of Primary 1 or 2 every child, whether dyslexic, or unable to get help at home, because parents are semi-illiterate will be able to read and do basic arithmetic, as well as be beginning to express themselves in writing, thus having a base to build all future education on.