I'm really shocked by this and think it is an appalling idea. As a former nursery worker and current CM 3 and 4 year olds need that access to an early years setting. It is vital preparation from school and just the right age to access nursery. EYEE was set up to benefit ALL children. If EYEE is means tested children will miss out.
Most middle earners will be paying nursery fees on top of the EYEE as they are, er, working, so need the childcare. So nurseries get a lot of extra income by taking these children (which may go some way to redress the difference between what nurseries charge and what LAs pay for a funded place).
And why the obsession with funded sessions for 2 year olds taking place in nursery? Deprived/disadvantaged 2 year olds are so much better off with a good CM. They can build up an attachment much easier with a sole carer which provides much more security to children who often come from chaotic and difficult homes.
And as for the suggestion that 15 hours of mean tested childcare a week would encourage people to have more children.....where to start with this one?! Ridiculous!