Stephen Frears directs a child’s-eye view of the Depression, hell-fire and fascism. Heather Neill reports

The opening sequences of Liam are full of deceptive Hovis-ad charm: rosy-faced Liverpudlians celebrate the New Year with jolly pub sing-songs, first-footing and a strong sense of community. Authority is represented by a kindly copper who knows when to turn a blind eye, while children, poor but contented, watch with a smile as the grown-ups get tiddly. “It’s how life ought to be,” says the film’s director, Stephen Frears. But this is the 1930s and a chill wind is about to blow down the picturesquely cobbled streets. The Depression will soon bring poverty, marital tension and fascism in its wake.

Written by prolific film and television screen-writer Jimmy McGovern, whose previous credits include Cracker, Priest and Hillsborough, this is the story of a period of dislocation in British working-class history, seen from the point of view of a seven-year-old boy. The setting is pre-war Liverpool, where the shipyards provide work and, when they close, men are at a loose end, food is short and women struggle to keep up standards (with the help of the pawnbroker). And crucially, Liam’s family - Sullivan by name and probably third or fourth-generation Irish immigrant - is Catholic.

McGovern has drawn on his own experience of childhood in 1950s Liverpool. He too was brought up a Catholic and still seems to be exorcising the effects, while admitting that in times of crisis, he still turns to the church. He says: “I was 40 before I discovered how difficult it is to commit a mortal sin.” Sin, guilt and hell-fire are the staples of Liam’s childhood and that of his 14-year-old sister, Teresa. But McGovern has chosen to deal besides with another aspect of the society he knew, and which found even more powerful expression in the pre-war years - anti-semitism. Alongside this is a paler and more surprising strand of prejudice, that against recent Irish immigrants.

Again, McGovern has useful reminiscences. He saw the “no blacks, no dogs, no Irish” cards in boarding house windows and as a boy worked in a Jewish chandlers. “I pinched a bar of soap every week,” he says. “I’ve no idea why - and afterwards I realised that, of course, they knew all along.” Then he adds, proudly: “Mosley got hit by a brick on Merseyside.”

When Liam’s father (in a touching, angry performance from Ian Hart) loses work and dignity, he looks around, like other men in a similar situation, for someone to blame, and focuses his anger on the Irish, who are poor, and the Jewish business owners, who are comparatively rich. He becomes a blackshirt while his grown-up son flits with communism. A strength of the film is its refusal to wag the finger too obviously. Bad choices, while not excused, are made by people who are in extremis.

Mr Sullivan’s decision to petrol-bomb the house of a wealthy Jew where his daughter has been in service brings its own dreadful punishment. It would be a shame to reveal the ending of the film, but Teresa’s involvement is crucial.

Megan Burns, who plays Teresa, has a calm, unshowy manner that won her the Best Newcomer award at last year’s Venice Festival. She’s in Year 10 at Maricourt school, Liverpool, and had little previous experience of acting, having only attended a weekly after- school drama class. She is still thinking of being a psychologist rather than an actor. Although a Catholic, she found Teresa’s hell-fire upbringing alien, but she had her own resources. “I talked to my nan and that helped. The clothes were quite strange.”

Stephen Frears says Megan became increasingly protective of her little screen brother. “Anthony (Burrows, who plays Liam) was sweet and really good,” she says. He also happens to be the same age as her brother.

For the audition Megan had to act the “confession” scene. Having had the fear of God put into them, Liam and Teresa attend confession with a priest, a bully who might have been imagined by Chaucer. Liam, who stammers and can barely get the words out, fears damnation because he has accidentally seen his mother naked and fears she is abnormal - he has previously encountered only smooth-shaven women in reproductions of famous paintings. Teresa has denied being a Catholic in her Jewish employer’s home and, worse, has become ashamed of her mother’s poverty.

McGovern says the scene still makes him cry, and credits Frears (director of High Fidelity, My Beautiful Launderette and Dangerous Liaisons) with avoiding sentimentality by refusing to dwell too long on tear-jerking shots.

There is a good deal of humour in the film: for older Catholics in recognition, for others in incredulity. Liam’s classmates, preparing for first communion, never seem to learn anything but that they are foul sinners who will burn in Hell if they don’t repent. The wide-eyed enthusiasm of their teacher (Anne Reid) for such grotesque word-pictures is itself risible as the seven-year-olds drink in every syllable. Fire - both benign and malicious - becomes a vivid visual theme. Frears says Catholics seem always to be locked in battle with their religion. Nevertheless, Liam won the International Catholic Award at Venice. There will, no doubt, be an outcry from some of the faithful, but this film should be seen by every teacher who has to deal with prejudice. Some things haven’t changed much at all.