FICTION: We had it so goodby Linda Harte Virago, 342pp, £14.99

‘THE STORIES your parents tell you have many ellipses,” observes a character in Linda Grant’s latest novel, We Had It So Good. “You cannot rely on them for the truth. Parents, by definition, are liars.” It’s this sense of generational mistrust, the need for people to make choices and define themselves in contrast to their own parents, that underpins much of this rich and many-layered novel.

Stephen and Andrea meet in a haze of marijuana smoke and patchouli oil in 1960s Oxford, where he, an American, is a Rhodes scholar. Andrea, solitary and sensitive and under the spell of her flamboyant friend Grace, picks Stephen as her first lover, and so begins their life together. After Oxford (where Stephen, a scientist, gets sent down for manufacturing LSD), they marry, move to an anarchist squat in London with their friend Ivan, and eventually end up in an apartment in Islington. Andrea becomes a psychotherapist, Stephen a journalist; they have two children, Marianne and Max; and so the decades pass in a series of jobs, home improvements and holidays.

Grant is never afraid to confront big ideas in her books, and this is no exception: while telling the story of their lives in episodic snapshots, she skilfully weaves the hopes and beliefs of Stephen and Andrea’s generation, and those of their parents and children, into the narrative. At Oxford and in the squat, Marxism and revolution are the order of the day; as they get older Stephen and Andrea contemplate the comfortable middle-class north London existence they’ve stumbled into, Stephen all the while mildly bewildered by the fact that England, and not sun-drenched California, has become his home, a place where “the continuous uncovering of the past, history’s insistence on not getting out of the way, was depressing”.

Indeed, the emigrant experience – one that Grant explored to great acclaim in her Booker-shortlisted novel The Clothes on Their Backs – is another major thread running through the book, from Stephen’s parents’ experiences in the US to his own later pilgrimage to Poland with his elderly father. More importantly, it’s the secrets that these past lives can harbour that fascinate Grant and haunt her characters.

Meanwhile, Andrea and Stephen’s friends follow their different paths, Grace becoming an embittered drifter, her chosen life an act of defiance against a horrific incident in her family past, and Ivan a successful ad man, rich, content and with no qualms about having “sold out”.

Marianne and Max also grow up and, in turn, rebel against their parents: Marianne becoming a fearless photojournalist – a rejection of all her mother’s gentle nurturing – and Max a conjurer, choosing illusion and concealment over his father’s belief in the illuminating power of science.

That Grant can so vividly encapsulate the lives and times of her characters in less than 350 pages is testimony to her skill as a writer and perceptive observer of human behaviour. She deftly switches between voices – Grace’s spiky bulletins from Cuba and Harlem; Marianne’s recollection of a fateful assignment to “her first war” in the Balkans – and cleverly plots the novel’s course to take in the massive changes that blow apart all their preconceptions about the world they live in, such as 9/11 and the London bombings.

Yet for all its framework of real life events and people – Bill Clinton makes a cameo appearance – the novel never loses its footing in the more intimate lives of the characters. Another of the pleasures of Grant's writing is the delight she takes in the details of clothes, which act as a kind of barometer of her protagonists' lives, their wardrobes reflecting their changing status and age. (This will come as no surprise to readers of her intelligent fashion journalism and 2009 book T he Thoughtful Dresser.)

Above all, though, We Had It So Goodis a portrait of a marriage and a family, and the compromises and bittersweet truths that come with age. In its title's melancholic echo of Harold Macmillan's 1957 statement, it captures the optimism and beliefs of a generation, and the changing world's implacable indifference to all their hopes and longings.

Catherine Heaney is a contributing editor of the Glossmagazine and co-ordinator of the Faber Academy in Dublin