This article reviews early education and care policies in the United Kingdom since 1997, when a Labour Government came to power, and sets them in the wider context of international changes. It argues that the Labour Government has, by intention and by default, supported the development of private sector, and especially corporate sector childcare. Corporate childcare has increased sevenfold in the period. The rapid scale of these changes has been ignored, or uncritically accepted, by most commentators. However, the Government's childcare policies have not had the anticipated result of increasing the numbers of mothers in the workforce, with the result that there is considerable oversupply of childcare provision. As a result, the private sector has experienced turmoil, as occupancy rates have fallen to an average of 77%, and the sector has become unprofitable. Within 2005-06 many nurseries closed, and there has been a consolidation of the remainder of the market. The private sector is now actively lobbying for more subsidies and a relaxation of regulations. The article concludes that, despite recent difficulties, trends towards private sector growth will continue and that research is urgently needed to investigate and document the changes.