Terence Davies' new film, his first for eight years, is a heartfelt and even ecstatic study of Liverpool, the home town of his 1950s boyhood. The movie is brashly emotional and sentimental - sometimes angry, more often hilarious. Nothing has given me more pleasure this year: the sweetness of its temper, the unfashionable seriousness of its design and its mixture of worldliness and innocence make for something sublime. It has something of Humphrey Jennings's Listen to Britain and something more of Noël Coward, the Coward of This Happy Breed or Brief Encounter. Like Coward, Davies revels in the potency of cheap music.
Of Time and the City was made possible by a modest grant from a number of public bodies, including Liverpool's Digital Departures project. The result is miraculous. It has ended the director's unhappy professional drought, returned him to the wellspring of his early autobiographical inspiration, and done so in such a way as to create new perspectives on the unholy trinity of class, sexuality and Catholicism. The movie might even inaugurate a new "late" period for this director: one showing him making peace with himself and with his past, but still laying painfully bare the cost of this process.
The form is simple enough: a relatively short (at 72 minutes) docu-collage of video and film footage about the Liverpool of today and yesterday, accompanied by the director's own choices from the classics and the pre-pop Light Programme numbers that moved him as a child. Davies' voiceover narration is as rich and dark and fruity as Dundee cake laced with mescaline. You haven't heard anything like it since Richard Griffiths' Uncle Monty. Davies' voice - indeed, his whole movie - is a plangent, baritone aria. In younger, lighter form, this same off-camera voice is to be heard reciting the service for the burial of the dead in the Death and Transfiguration section of Davies' trilogy from the early 1980s.
Its effects are forthright and arguably unsubtle. Davies hits you with Housman and Eliot. His musical choices are familiar, and the images and newsreels he selects are not novel in any strict sense of archival discovery. But the juxtapositions deliver an intravenous jolt of rapture and sorrow, all at once. Davies is incensed by postwar Britain's caste system; he is fizzing with scorn and rage on behalf of Liverpool's resourceful, creative working class, imprisoned in brutal housing and patronised by the better-off. But he is also scornful and enraged at them - and at himself - for allowing this to happen for so long. Davies sees a long, rotten, miserable time in British history, as chokingly dull and sexless as an eternal Sunday afternoon, and he sees this period as starting well before the Chatterley ban and ending well after the Beatles' first LP, if indeed it has finished at all.
Which brings me to the film's cheekiest coup: Davies' cheerful denigration of the Beatles. In theory, Liverpool's greatest sons delivered exactly the death blow to pompous, class-bound Britain for which Davies was yearning. Yet their cultural earthquake arrived at precisely the moment when the young Davies fell poignantly in love with Bruckner, performed in genteel concert halls in which there was no opportunity for copping off with anyone. We see the Beatles in full swing, playing Hippy Hippy Shake - though Davies dubs over the superior version by the Swinging Blue Jeans, perhaps as a subtle slight, or perhaps because rights clearance for the Fab Four was too pricey. The kids duly get into the Beatles in the Cavern Club, but Davies removes the pop soundtrack and replaces it with an unhurried, swooning orchestral score from the 19th century. The zeitgeist-malfunction is bizarre and brilliantly wrong in the way real life always is.
All Davies fans know the scene from his trilogy in which a gloomy church interior is inspected while we listen to the agonised narrator on the phone, begging someone to tattoo his scrotum, a procedure for which he will need to be as "hard as a biscuit". Davies shows these same churches in 2008 as deconsecrated, transfigured into trendy wine bars, clubs and eateries. You can hear the relief in his voice and see it on the screen. Goodbye to all that guilt, thank God.
But there is something else there, too: bafflement and pain at the spectacle of a city he no longer recognises. Miseries have been swept away, but certainties also. When he surveys young people thronging the streets on a Friday night, with money to spend, they do not appear to have the "white working class" label as clearly as their forebears. What are their loyalties? What is their identity? If consumerism has abolished the shackle of class and, consequently, the aspirational escape route of education and culture, then what now are their challenges, their private pains? Davies appears to be asking himself if he can understand them at all, but even this admission of weakness as an artist is bold and even thrilling.
It could be that, like Philip Roth, or even like Proust, Davies will find his own youth is a rich seam that he has come nowhere near to exhausting - even that the act of creative exploration creates new, undreamed-of reserves of raw material. What a lovely film this is, and what a welcome comeback for one of Britain's greatest film-makers.