Glasgow, the mid-1970s. A little boy, Ryan Quinn, sways back and forth wrapped in a curtain before being swatted for misbehaving by his mother. As the two leave their house, Ryan evades a planned visit to his father and makes his way down to the canal where he saw his friend, James Gillespie, playing. The two begin rough-housing in and around the murky water and Ryan falls in, headlong. James runs away, terrified. Ryan has drowned.

The morning after Ryan's funeral, James and his sister Anne Marie watch a television programme showing the scourge of rats in Glasgow, brought on by a protracted dustmen's strike. Returning to the canal, James observes a slightly older girl named Margaret Anne taunted by a bunch of slightly older boys. They toss her glasses into the water. James sticks around after and the two become friends. Meantime, Ryan Quinn's mother is moving to a new home. Tearfully departing, she gives James a pair of shoes she intended for Ryan. They do not fit. James later slashes up the tops with broken glass.

James makes a new friend, Kenny. Kenny is a hyperactive, slightly simple-minded boy who loves animals. He demonstrates his impression of an ostrich, but James points out that this type of bird cannot fly. Seeing his sister hop on a bus, James steals some change from his father and does the same. The ride takes him to a new housing estate in what seems to him an idyllic countryside. James explores a mostly-finished house in awe. That night, Tom Jones is on the TV singing, to the delight of no one except Anne Marie.

James and his sister are treated for lice. Later, James takes out the rubbish, lighting a cigarette and playing the grown-up. Kenny comes down to show James his birthday present - a white mouse called Snowball - but the neighbourhood roughs again intervene. They toss the mouse about and then tell its owner that Snowball can fly; he will, in fact, become the first mouse on the moon. Kenny responds by tying the mouse to his birthday balloon and sending it spiralling into the stratosphere. James later dreams of Snowball making lunar contact with thousands of other expatriate mice.

Kenny's attempt to catch a perch in the canal the next day nearly results in a real tragedy. James' father is summoned to the rescue just in time to fish him out. James, meanwhile, has taken an innocent bath with Margaret Anne. Upon returning home, he lets in two people from the Housing Council who greet his just-awakened father, half-naked and filthy from the canal. His father is furious with James for admitting the inspectors because the family has been counting on a favourable report that will allow them to relocate. James escapes the increasing antagonism by taking refuge at Margaret Anne's house.

The arrival of the Army to replace the striking workers is met by interference from the neighbourhood's bored children. Margaret Anne is tormented by the boys once again, giving in to their sexual demands. Dejected, James decides to tell Kenny the truth - that Snowball is dead and buried. Kenny in response, says he saw James kill Ryan Quinn. The next day, drawn back to the canal, James plunges deep beneath the water. He has a vision in which the whole community helps the Gillespies relocate to the housing estate in the countryside.