Assuming that there really are children who are taught with a very strict whole word technique, and know no letter sounds, how do they write? Do they only ever write words that have occurred in a spelling test?
I think the problem with phonics as it is proposed to be taught is that many children are not ready to sound words out at 4, 5 or even 6. Some of these children will pick up sight words along the way, and have a rough sight word method of reading despite being mystified by phonics. Many of these children will pick up phonic rules at a later point (as rabbitstew says, things taught in primary school are taught again and again, and if you learn a foreign language you learn phonetic rules for that language and how they differ to English, and presumably spelling rules are still taught through primary school).
However, to assume every child can be taught to read with phonics at the pace specified by Gove, and to label children who don't as 'poor readers' is I think misguided and I don't think will give us Finnish reading rates. (Although I reckon smaller class sizes, later formal learning and well paid, respected teachers would).
If it is really assumed that 20% of children can't read because of teachers wilfully using a failing whole word technique for no other reason than prejudice, then frankly, I think we should all home educate.