One of the more challenging chapters in Noel Annan's self-congratulatory history of 20th-century intellectual life, Our Age (1990), is entitled, "Was Our Age Responsible for England's Decline?" Characteristically, Annan fudged the answer, but in Our Times, AN Wilson has offered a resounding "yes". While Annan chose to highlight the humanity, wisdom and cosmopolitan intent of the post-Victorian era, Wilson has produced a scintillating, coruscating indictment of British national collapse since the 19th century. As the final instalment in his three-volume account of modern Britain - The Victorians; After the Victorians; and now Our Times - the book offers a veritable decline and fall.

As with his previous works, this is not a methodical history but the portrait of an age constructed around telling incidents, mini-biographies, high culture, low life and journalistic gossip. There isn't much of the longue durée in Wilson's postwar narrative, and readers will search in vain for a broad account of decolonisation and post-imperial mentalities, the fraying of social class, or the painful economic realignment of the last few decades.

Rather, his great strengths lie, as before, in chronicling the misfortunes of organised Christianity, the fate of the royal family and the flow of intellectual history. Indeed, the book opens with a compelling sequence contrasting the tribal magic conjured up by the dreamscapes of JRR Tolkien and CS Lewis with the rational, energetic, open society proffered by AJP Taylor and Karl Popper. "If social cohesion is measured in terms of 'motorcars, iron and steel, machine tools, nylons and chemicals' then Britain in the mid-1950s looked set for improvements," writes Wilson. "If societies, however, require shared mythologies, ideologies, folk memories, to help them cohere and to live through times of crisis, then perhaps the pessimism of Tolkien and Lewis was prophetic."

Wilson then charts such pessimism and the decline of national sensibility through the travails of the Church of England, the collapse of Roman Catholicism and the evisceration of Britain's rural and civic fabric. Despite his curious admiration for Prince Charles, even the royal family comes in for censure. Whereas in After the Victorians, Wilson was full of admiration for the achievements of "conservative, monarchical, aristocratic Britain" in maintaining "a political ideal of personal freedom" in contrast to the Gulags and Dachaus of continental Europe, by Our Times, Wilson is highly critical of Queen Elizabeth II for failing to intervene in the dismantlement of Britain.

Rightly, the politicians are to blame. And Wilson approaches postwar politics with a Napier-like focus on personality and place which allows his remarkable capacity for character assassination to shine. A vainglorious account by Edward Heath of his chaotic conducting of the London Symphony Orchestra provides a marvellous metaphor for a premiership which Wilson regards as a series of betrayals over Europe, fisheries policy and the demolition of English county governance. Blair and Major are swiftly traduced, but he saves his real venom for the cynicism of "Supermac", this "man of masks ... who regretted the loss of old values, but who did not really believe in the power of politics alone to preserve them".

Along the way, the history can get submerged in the minutiae: quoting journalist Rod Liddle on Diane Abbott's view of Chairman Mao is unnecessary. However, Wilson's idiosyncratic approach frequently yields up some true gems: a chapter exploring the connections between Michel Foucault, Enoch Powell and postwar mental health policy being especially engaging.

Yet with its uncharacteristic, unironic anger at the loss of nationhood, this book has a far more polemical edge than Wilson's previous volumes, situating itself somewhere between Richard Weight's seminal postwar history, Patriots, and Peter Hitchens's impassioned The Abolition of Britain. "Nations may indeed ... be inventions," David Cannadine once wrote. "But like the wheel, or the internal combustion engine, they are endowed, once invented, with a real, palpable existence, which is not just to be found in the subjective perceptions of their citizens, but is embodied in laws, languages and customs, institutions - and history."

And it is the sense of the spokes coming off the wheel which dominates Wilson's account as a "shared sense of identity and purpose" is undone by mass migration, political elites, European integration and cultural collapse. In the final chapters, Wilson asks the reader to compare and contrast "the England of Lord Salisbury, Arthur Balfour and Lord Morley, with the England of Ed Balls and Jacqui Smith; the England of Edward Elgar with that of Harrison Birtwistle, the England of William Nicholson with the England of Gilbert and George ..."

As with Annan, the vital comparator remains the Victorians. But while Annan marvelled at the advance of liberal enlightenment during the 20th century, Wilson sees any material advances more than cancelled out by an apocalyptic process of social and cultural decay. Naturally, under Wilson's pen, such a history is richly told - yet just as he is so obviously happiest among the Victorians, I for one would rather be among them with him.

· Tristram Hunt's Penguin biography of Friedrich Engels will be published early next year

On contemplating the literary career of AN Wilson, the only proper reaction is awe at his extraordinary productivity. By my count, he has published almost 40 books - although there have been so many it's hard to keep track - and he can hardly be accused of ducking the big questions, since they include biographies of Milton, Tolstoy, Jesus and St Paul as well as novels of sufficient quality that the last was Booker-longlisted.

Six years ago, he moved into the field of history with a long, rich and evocative portrait of the Victorian age; three years ago, he published a sequel, rather unimaginatively titled After the Victorians, which was even more opinionated, a fair bit sloppier and no less entertaining. Now we have his take on the last half-century, a book with all the weaknesses of swift writing and superficial research, but, almost infuriatingly, all the strengths of Wilson's wit and literary insight.

While Our Times is structured along fairly predictable lines, interweaving chapters of political narrative with sections on such subjects as the rise of permissiveness and the decline of Christian worship, that is the only predictable thing about it.

In fact, there is plenty to make more sober historians blench. It is hard, for example, to imagine many academics repeating the funny (if well-worn) story about Diana Dors, née Fluck, being introduced at a church fete by a Swindon vicar as 'Diana Clunt', and then giving the reference as Wikipedia. Most historians wouldn't ignore economic matters almost altogether, as Wilson does, nor would they agree with his claims that Clement Attlee and Ernest Bevin wanted to dismantle the empire.

And, as was the case with After the Victorians, some of Wilson's factual errors almost defy belief. Getting the dates of the Glorious Revolution (too late) and the Siege of Derry (too early) is one thing, but when Edward Heath goes to the country in February 1972, two years too early, you almost wonder if Wilson is doing it deliberately.

As a work of serious history, in other words, this book is an abject failure. As a very funny, extremely opinionated, always provocative and often thoughtful read, however, it is a terrific success, a verdict that will no doubt disappoint many historians who do know their dates but have none of Wilson's fizz. True, he can be very glib, arguing, for instance, that the Cold War was a clash of 'uncertainties' rather than certainties, which only goes to show that he has been reading too much John le Carré and not enough (indeed, not any) documents from Washington and Moscow.

And yet he is capable of serious and incisive judgments, especially when discussing the struggle between religion and secularism, something of an obsession here but a powerful theme often neglected.

The erosion of the old 'tribal magic', as he calls it, is one of the keys to the book. In Wilson's eyes, the decline of religious belief is one of the central elements in the erosion of social order. Its absence explains the enduring appeal of such writers as JRR Tolkien, a man he hugely admires, and whose influence on the global imagination, he points out, has been greater than that of any other post-war British writer.

Above all, Wilson is endlessly entertaining. He compares Benjamin Britten not with Tippett or Vaughan Williams but with, of all people, Sid James, while later he develops an elaborate comparison between Tony Blair and TV presenter Philip Schofield. His treatment of the monarchy is a strange and always funny mixture of deference and contempt. The Queen, although 'shy and stilted', emerges well. Prince Charles wins praise for his environmental and architectural enthusiasms and Diana is described as 'truly great'. By contrast, Prince Philip comes across as mildly ridiculous. 'I'm nothing but an amoeba!' he yells when told that the Queen will not take his surname. Yet he gets off lightly compared with Lord Mountbatten, in Wilson's view a 'mass murderer' for his 'gross mismanagement in India', and later an 'elderly popinjay, with his arrogant manners and his fondness for naval ratings'.

Wilson's character sketches are often masterpieces of injustice. He considers the Beatles pretentious and, bizarrely, describes the Rolling Stones as 'in every way more talented', even describing Mick Jagger as one of the world's great ironists. But his real targets are politicians of all stripes, who usually come off badly. Enoch Powell emerges as a bristling madman, with his Birmingham accent constantly maligned. Harold Wilson, rumoured to have got one of the best firsts in Oxford's history, is 'half-educated'. Ted Heath's hapless Chancellor Anthony Barber 'seemed like a man playing the vicar in a suburban amateur dramatic society'. John Hume, a secular saint in some quarters, was 'weasly'. Jim Callaghan was simply a 'bonehead'.

Yet other characters comes in for peculiarly lavish praise. He admires John Major for his 'unflappability' and 'understatedness', while David Owen is lauded for his 'powerful charisma' and 'high intelligence' and would have been 'one of the truly great Prime Ministers'.

The politician who gets the biggest beating is Roy Jenkins, or 'Woy', as Wilson calls him throughout. Since Jenkins is usually the hero of books like this, there is something unexpectedly and perversely refreshing about finding him traduced. When Woy first surfaces, Wilson draws attention to his 'Balliol bumptiousness' and 'claret-marinaded dinner-party manners' and mocks the 'pomposity of his aristocratic, high-table verbal mannerisms ... the ever-stirring right hand, sometimes to emphasise a debating point, sometimes to feel along a hostess's thigh'. But he is only warming up, for when Woy reappears as a founder of the SDP, he is 'puffed-up, pompous and vacuous'. He was, Wilson tells us, 'an incompetent Home Secretary and a disastrous Chancellor', his achievements dwarfed by those of Margaret Thatcher, a 'person of high intelligence'.

This might suggest that Wilson is an unalloyed admirer of Thatcher and Thatcherism, but that is not really true. He clearly approved of her guts and vision, but at the same time he bemoans the consequences of her uncompromising revolution, from the communities destroyed by unemployment to the traditional folkways concreted over in the name of the market.

Beneath all the jokes and the sneers, he has a serious point to make. Britain, he laments, has 'stopped being British', a process he blames partly on immigration (wrongly, in my view), but also on globalisation, market economics and the uncritical worship of novelty. There is no need to share his more reactionary prejudices to concede that he has a point, just as there is no need to share his hatred of poor Woy Jenkins to enjoy this infuriating, passionate, hilarious and sometimes plain barmy book.

· Dominic Sandbrook's most recent book is White Heat: A History of Britain in the Swinging Sixties (Abacus)