The British government has placed the extension of school choice at the centre of its education reform programme for its third term in office. Those promoting choice make an appeal to a simple economic argument. Competitive pressure helps make private firms more efficient and consumer choice acts as a major drive for efficiency. Giving parents the ability to choose applies competitive pressure to schools and, analogously with private markets, it is assumed they will raise their game to attract business. This article subjects this assumption to the scrutiny provided by the theoretical and empirical economic evidence on school choice, and then uses the evidence to examine the potential impact of current policies to extend choice being proposed by the Labour government. The key question we address is whether policies that extend choice will improve educational outcomes and, if so, under what circumstances. We reach three main conclusions. First, increasing school choice will create losers as well as winners. Second, flexibility in the supply of school places is crucial to the success of a policy to extend school choice. Third, the role of peer groups partly determines the effects of school choice.