The opening credits to Shane Meadows’s This Is England feature the sound of the Clash and the sights that sum up the 1980s: Roland Rat, Mrs Thatcher, Duran Duran, the Rubik’s cube, the royal wedding. But Meadows’s film has no interest in cosy nostalgia. His montage of the sunny side of popular culture quickly gives way to dark images of violence and social conflict: the miners’ strike, National Front marches, football hooligans, Greenham women tearing down fences. The credits end showing a Falklands soldier being taken off the field of battle, with half a leg missing.

Here is something unusual: a film set in the 1980s, but with not one greedy yuppie or poverty-stricken OAP in sight. And instead of the usual setting of inner-city decay or London’s Docklands, Meadows has set his story in an unnamed coastal town somewhere in the north of England. This is where 12-year-old Shaun (Thomas Turgoose) lives with his mum. He has the small body of a child and the face of a grown-up; imagine a mixture of the Clitheroe Kid and the boy from Ken Loach’s film Kes. This Is England – at least the first part – is Loach in the age of the Clash, Dr Martens, teen tribes, sex, drugs and skinheads.

We meet Shaun as he’s heading off to school and suffering the torments of constant teasing, mostly about his flared trousers. When a boy in the playground makes a crack about Shaun’s dad, who died in the Falklands, Shaun takes a stand and attacks. It’s on his way back from a rotten school day that he comes across a gang of skinheads hanging out in an underpass. Their leader is the amiable, kind-heartedWoody (Joseph Gilgun), who sees sad Shaun and invites him to join them. Woody and his gang – which includes his girlfriend, Lol (Vicky McClure), a black skin called Milky (Andrew Shim) and a Boy Georgeish girl called Smell (Rosamund Hanson) – soon become a substitute family for Shaun. He undergoes initiation into gang life by having his head shaved, putting on boots and braces, and becoming one of them.

Meadows has managed to make a warm-hearted coming-of-age saga set among skinheads. Sounds sentimental? Not really, for there was a time when skins welcomed black people, as well as their music. But the whole tone and balance of the film changes with the arrival of Combo (Stephen Graham), who has just got out of prison. Suddenly, we’re in the territory explored by Tim Roth in Alan Clarke’s Made in Britain. And Graham gives a performance of comparable power to Roth’s.

What follows is a battle between nice Woody and nasty Combo for the hearts, minds and fists of the gang. Combo is a racist who wants to recruit them all to the National Front. Where Trevor had a gang, Combo has “my army”. Combo wins Shaun over when he convinces him that this is the way to redeem his father’s death.

Here, the film loses its intimacy and subtle observations about the emotional dynamics of the group. Gone is Meadows’s unobtrusive look at the complexity of loyalty; instead, the film becomes a search for the reason young working-class males are seduced by the racist right. But Meadows reveals nothing fresh; his is the familiar line about how the white working class has lost its sense of self-worth and collective identity. This theme appears early on when Gadget (Andrew Ellis) explains to Woody why he slaps Shaun around the head: “I feel I’ve gone down in rank since he’s come.” It is this sense of displacement, of being pushed out of your gang/country by foreigners, or even little kids, that the far right exploits. Worse still is the way the film makes a clumsy and fatuous attempt to link the war in the Falklands with the kind of war Combo and his skinhead army want to wage back at home. It is saying: encourage young men to be men through violence and the demands of the tribe, and see what happens.

This Is England has been praised for its accurate portrait of teen life and the skinhead subculture. But I beg to differ. Would a northern skinhead in 1983 really have used a term associated with 1990s rave culture, “chill”? Would a girl skin have said “No worries”, as one does here? Were skinheads such as Combo really against the Falklands war?

In an age when radical Muslims are recruiting young Asians as suicide bombers, this account of how the white working class was exploited by the far right seems a little out of sync with our times and concerns.

This Is England 18, 103 mins

KO

A-OK

OK

So-so

No-no

Editor's choice

• The 100 Best Films of the Decade
• 70 facts you didn't know about Marvel
• The 50 Biggest Movies Of 2010