With this book's stirring, storm-clouds-on-the-horizon title and a picture of Sue Ellen and J R Ewing in a clinch on the cover, it looks for a moment as if Tim Lott has branched out into American epic, stepping away from the suburban dystopia that has thus far been his speciality. But failure is Lott's thing, and it is soon obvious that his second novel is firmly rooted in the tradition of British bathos - of EastEnders and Raymond Briggs, of Mike Leigh and decades of lowered expectations.

The book starts in 1979, in a council flat in Fulham, London, where Charlie and Maureen Buck live secure in the knowledge that, basically, "all things stay the same". Charlie is a typesetter for the Times - "a job for life"; Maureen keeps the house clean and experiments in the kitchen (lumberjack pie: instant potato, Spam, cheese, beans). The world is sufficiently advanced to have produced a number of creature comforts, but not so fast-moving that the Bucks can't keep up. There is Status Quo and, more reassuringly, there is the status quo. "Coffee is instant. Bread is sliced. Weather is rainy. Car, for Charlie Buck, is a plum-coloured Triumph Toledo with a starter motor that is always jamming."

Still, these are not so much happy times as static times. Lott's Britain visibly sags in the late Seventies, having reached an economic, political and aesthetic dead end. The period details - and the Bucks are swimming in them - are profoundly ugly: "the chocolate-coloured cord-effect wing three-seater"; the multicoloured "Walk Thru" curtain-strip door ("Maureen divided into vertical bands by the gaps"), "the cheap sticks of furniture, the dull walls". Life is banal, for sure, but at least it's a known quantity.

And then, suddenly, stirring the Bucks from their green-brown half-life, there is Mrs Thatcher. The world starts to turn. The Bucks' 18-year-old son, Robert, goes to live in a squat and turns down his father's offer of work through the printers' union. Charlie buys his flat from the council, and to his amazement makes some money (people want to live in Fulham!). The Bucks move to Milton Keynes, a pioneer town of Barratt homes and infinite possibilities. They have credit cards, and shares in British Gas. Rupert Murdoch - "an Australian convict", says Charlie - buys the Times.

This could have been a cruel book, so clearly does the Bucks' fate await them, looming darkly at the end of the Eighties. Charlie's old-fashioned faith in work and marriage, and his new belief in the housing market, make him a sucker for authorial punishment, and Lott hands it out to him. His life becomes a series of time bombs.

But after an uneasy and somewhat two-dimensional start, both of Lott's leads develop from caricature into credible beings, who, for all their tragic flaws, are more pathetic than ridiculous. Increasingly, we laugh with them, rather than at them. Their marriage is a jumble of affection and pity, and these are pretty much the emotions that Lott encourages in his reader. I'm not spoiling anything by saying that Charlie ends up a homeless drunk (the book is framed by this future misfortune); the question is, how will Lott manage to move or surprise us when the ending is a foregone conclusion? The shock, when it comes, lies in the extent of Charlie's emotional implosion: here is a man who has spent his whole life not causing a fuss, not minding really - until there comes a point where he has to, and the consequences are devastating.

It's not easy to make this transition from initial bathos to genuine, unsettling pathos, but Lott makes us see how the one shades into the other. He pulled off the same trick in his memoir The Scent of Dried Roses, which was a different kind of period piece, but no less concerned with lives left unlived. As in that book, the occasional hints of misanthropy are tempered by passages of warmth and humour: Lott writes great dialogue, and there are two wonderfully tragicomic meals at the heart of the novel. These are the moments when the Bucks transcend their socio-economic prison.

In the end, only Maureen gets out alive. In 1979, she used to dress up for Dallas - she liked something about the power play, she told Charlie. Ten years later, after the hurricane (both real and metaphorical), she's in business herself, a sort of Sue Ellen Ewing of Milton Keynes. Not quite an American epic, then, but about as close to it as the circumstances will allow.

Melissa Denes works on the Guardian Saturday magazine