Philip Hensher's greatest attribute, after his energy and fluency, is his steady head; he may be audacious, but he is judicious as well. The greatest risk he has taken - and pulled off - in his new novel is with the narrative voice, the only constant in a work characterised by its busy variety and steady flow of human traffic. It is a voice that gives voice to its characters, in moments of vernacular modesty ("to give him his due", "He had a point"), but it also provides a channel for mischievous allocutions, as when a series of metaphors is preceded by "There might be a metaphor here". Detached from a broader purpose, these tendencies might seem arch, and their coexistence baffling, but Hensher has a purpose - to portray his characters as worthy of ridicule but not contempt, and to create sympathetic satire.
So, while it may seem that Hensher is always joking, he is never only joking. His use of the word "everyone", a trusted tool, provides a case in point. Like Jane Austen writing about a truth being "universally" acknowledged, Hensher is making a joke at the expense of a community's narrowness and self-involvement when he writes that everyone knew or did or said something, but at the same time defers to a community's way of seeing and speaking about itself. For "everyone" refers to the relevant inhabitants of the genteel Devon town of Hanmouth (population: 4,000), whose comings and goings over the long summer of 2008 ("an Indian summer, everyone said") are seen from the perspective of 2009.
The opening chapters introduce a sprawling (and ever-growing) cast of characters, all of them residents of Hanmouth, or of "that postwar estate" considered part of Hanmouth by everyone except the inhabitants of "Hanmouth proper" or "Old Hanmouth" - that is to say, by everyone except "everyone". Here goes: Kenyon, who used to work at the Treasury but was "donated" to an NGO, is married to Miranda, a leading figure in the Hanmouth Book Club and a lecturer at Barnstaple University, where she teaches Faisal Khalil, whose father, Ahmed, a teacher at the local sixth-form college, is having an affair with Kenyon - an affair that the narrator and the reader know about, though nobody else does. Over on the Ruskin estate, a young girl called China, daughter of a local hairdresser and negligent mother called Heidi O'Connor, goes missing, much to the fascination and disgust of the true Hanmouthites, especially the Brigadier and his wife Billa and Billa's friend Sam, who runs the cheese shop and organises hedonistic orgies with his husband, the aristocratic lawyer Harry.
Among the newer residents of Hanmouth proper are John Calvin, who has formed a neighbourhood watch ("the sort of initiative only newcomers were likely to take"), and Alec and Catherine Butterworth, a retired couple whose dependent son David comes to stay with a young Italian called Mauro, who is pretending to be David's boyfriend because he owes him £1,600.
It is the happiness of the central couples - Kenyon and Miranda, Sam and Harry, Alec and Catherine - which increasingly consumes the novel, though most of the long central section, entitled "King of the Badgers", is devoted to David and his depression, self-loathing and body fat. The catalytic kidnapping plot, with its echoes of the Madeleine McCann case, is introduced feverishly through the gossip of the salivating yet finger-wagging Hanmouthites, but then gently developed; it is through David, talking to Mauro, that we find out "they've arrested the girl's mother", and it is a walk-on character, a family man with a dogging habit, who finds a crucial corpse. Getting the plot to behave is a team effort; Hensher, by giving each of his characters something to do, ensures that it thickens but does not coagulate.
This approach enables Hensher to indulge his appetite for cultural detritus (one of Peter Shaffer's plays is name-checked on page ten, another on page 361) and to concentrate on such problems of human interaction as snubbing (considered on page 71 and again on page 357). At one point, a character reflects that her husband, being male, is "not very interested in the smaller details of social life" - an acknowledgement that Hensher is working in a female tradition. There is plenty of Martin Amis in his make-up, but even more of Austen, Ivy Compton-Burnett, Margaret Drabble and Iris Murdoch. Hensher's last novel, The Northern Clemency, borrowed a closing metafictional flourish from Drabble's The Radiant Way. This time he slips in a small allusion to Murdoch when Miranda reflects that, in Kenyon's days at the Treasury, she at least knew, "in an abstract and uncomprehending way", that he did something "very important . . . something to do with the balance of payments". In Murdoch's novel A Fairly Honourable Defeat, Simon thinks about how "flimsy" he is, "how hopelessly ignorant about important things such as Mozart and truth functions and the balance of payments" - which is a phrase associated with his boyfriend Axel's job. This is what Hensher calls a "tortuous joke"; it should be said that most of the book's many jokes are less opaque, and funnier.
King of the Badgers  is Hensher's third exercise in social portraiture on a grand scale, after The Mulberry Empire, which made the longlist for the Man Booker Prize in 2002, and The Northern Clemency, which made the 2008 shortlist. It would be gratifying to see the new novel go one better, not least because the prize has never been given to a large, energetic and capacious novel about English life.
Twenty years ago, one of Don DeLillo's characters claimed that it is now the terrorist, rather than the novelist, who affects "the inner life of the culture", but when it comes to pronouncing on the condition of England, the novelist has given way to the newspaper columnist, though this figure rarely possesses the requisite breadth of compassion. (Oliver Twist would be just another "Asbo yob", Tom Jones a "love rat".) Hensher writes a column for the Independent, and the new novel dramatises a worry expressed there about the erosion of privacy by the government and media.
But it also airs an older concern. Of the three divisions identified by Victorian novelists - rich/poor, north/south, country/city - Hensher is concerned most of all with the third. The second sentence of the novel describes cities as places "where the guilty huddle", and soon after that a paparazzo visiting Hanmouth gives the boatman "a brief, city, impatient look"; down the A-road from Hanmouth, "feral" children roam, their misadventures fuelled by "glowing orangeades", while at a motorway service station the reader witnesses "the burger bar's sugary, vinegary, salt-imbued contraptions glowing in the illustrations above the servers".
Typically Hensher brings to life the fear of urban encroachment, of pastoral purity being invaded by artificial colouring, in a virtuoso comic set piece, a long sentence about the guests heading for Sam and Harry's coke-and-bondage night which manages to combine mock-epic parody (of the Homeric simile and catalogue of ships) and satire (on modern tastes) without collapsing into Luddite gloom or Scrutonish bile, and without smothering under the weight of knowingness the possibility for sincerity and beauty:
Like timber dislodged by spring floods; like unmoored boats swept into the stream; like cast-off objects driven before the force of a renewed river, taking possession of a dried-up channel at the end of a hot Devon August; like the return of beasts to their place of spawning at the close of their season of youth; like all of that, the Bears turned and followed the scent back to the house in Hanmouth . . . speeding up, shedding their concerns as they went, flying in their Toyota Civics, their Ford Primeras, their VW Golf GTIs, their Peugeots, their Fiats, their Ford Kas, their Jaguars, their Bentleys, in shades of royal blue and silver, and silver and white, and red and silver, and silver, silver, blue and silver, catching the evening light like trout turning in a stream.
Monica Ali's new novel also touches on English images and archetypes, but where Hensher presents competing versions of England - one of them marked by American influences - Ali erects a "stuffy England", a monarchical monolith defined by stiff upper lips in opposition to easygoing, republican America, where you are permitted a fresh start. Ali has also drawn on a tragic tale from recent English history, but where King of the Badgers serves as a corrective to the tabloid mentality, Untold Story exhibits an all-too-familiar fascination with celebrity.
Having established herself as a novelist of the people in Brick Lane, Ali now turns her attention to "the people's princess", who, in this retelling, faked a drowning in 1997, underwent plastic surgery in Brazil and relocated to Kensington, North Carolina, where she calls herself Lydia Snaresbrook and keeps quiet about her past. When we aren't with Lydia - working at a dogs' home or getting better acquainted with her new boyfriend or playing Carrie Bradshaw to her three American sidekicks - we are given exclusive access to the 1997 diary of her former private secretary, Lawrence Standing, the one (terminally ill) man who knows the whole truth. The other character given his own chapters is the Catholic paparazzo Grabowski, who stumbles upon the retired princess shortly before the tenth anniversary of her "death".
Hensher, as well as relishing the minutiae of his voluptuously imagined fictional town and of the world as he remembers it in 2008, tickles the reader with details that could be true but aren't, such as "a girl out of Friends starring in John Gabriel Borkman"; and he draws on the McCann case, though not so much that China displaces, or stands in for, Madeleine, who also exists in his world.
Ali offers her heroine as a "fictional princess", but she is a fictional princess who conducted a "campaign against landmines", who "covertly co-operated" on a revelatory biography, and so on. The relationship between recorded fact, outright fabrication and plausible invention is central to the book's identity and scrutability, and its mishandling has consequences for both. The reliance on Diana's facts prevents Untold Story  from engaging as an autonomous account of a runaway princess trying to forge a civilian existence, but the recourse to invention prevents it from functioning as a work of speculative history like Muriel Spark's novel about Lord Lucan, Aiding and Abetting, or Gordon Burn's Alma Cogan.
Diana's cleverness is well documented, but there is some debate about her intelligence - a debate that Ali does not complicate so much as blow out of the water by portraying Lydia reading Solzhenitsyn's One Day in the Life of Ivan Denisovich. It is hard to imagine the real Diana, whom Christopher Hitchens more or less factually described as a "disco-loving airhead", reading this challenging (if short) novel. Clive James, having railed against journalists who themselves read only "three books a year" but called Diana "stupid", later wrote that "she had never read a book", though Tina Brown, in The Diana Chronicles, reminds us that the princess had a "teenage devotion" to Barbara Cartland - a devotion that, according to Cartland, hadn't been "awfully good for her".
Ali's novel won't do anyone any harm, but nor does it do for Diana's suffering what Solzhenitsyn did for Ivan's. Much of the straight comment is delegated to Lawrence Standing ("who understood everything"), yet his observations are rarely trenchant: "The deeper the darkness, the brighter she shone." Of her fame, he says: "Nobody lived it at her level, with her constraints, in the non-stop multimedia age." At least when Standing writes that the princess had "flirted for England", he gives a more sober impression of Diana's contribution to national life (not England's rose, but England's tease), in contrast to the publication, nearly 15 years after her death, of this bewildering novel, which even Diana-worshippers will surely find crass. l
Leo Robson is the New Statesman's lead fiction reviewer