Billy Elliot is set in a mining community in the North East of England during the 1980s. The setting is significant, because it represents the last gasp of that industrial world: the men of this community are miners like their fathers before them, but their sons will not follow in their footsteps. The backdrop of the miners' strike represents the changing tide, and Billy and his friend Michael are examples of the new type of man that might emerge into this post-industrial landscape.
Billy's father is Scottish, and his black-and-white statement that "boys don't do ballet" resonates particularly in an accent which connotes dourness, masculinity, and moral uprightness—a more extreme form, as it were, of the North East English accent the others speak. He is the extreme of a man's man.
Meanwhile, Billy is up in the clouds, not part of this world—think of the opening scenes of him bouncing on his bed, light and trying to escape. His rejection of boxing in favor of dancing is construed by his father as a rejection of masculinity and the way things should be. His dancing teacher, Mrs Wilkinson, however, shepherds Billy towards his dreams, suggesting that she, too, would like to escape the strictures gender roles have placed upon her in this very working-class environment.
Michael is very literally transgressing gender in a way which demonstrates, in fact, true bravery on his part. It is often suggested that he is gay, but the way he is presented as an adult in particular makes it also seem likely that he is a transgender character. Billy represents the fact that boys certainly can and should "do ballet," but Michael goes beyond this to remind us that the gender we are assigned at birth does not necessarily dictate who we will become.