Ian McEwan’s new novel is a stylish and sexy morality play set in the world of British espionage of the early 1970s. If it doesn’t have quite the intensity of Atonement, it’s still a smart, entertaining story that explores the boundary between truth and fiction, in both life and stories.

Recruited by an older lover into little more than a glorified clerical job with MI5, Serena Frome is a young Cambridge grad whose indifference to the mathematics she studied there is matched only by her love for reading. It seems fitting that she’s enlisted in the “Sweet Tooth” program, posing as the representative of a foundation that encourages unsuspecting writers to produce stories that portray the Soviet Union and its allies in a negative light. Serena is assigned to recruit journalist and aspiring novelist Tom Haley into that group. Unsurprisingly, their business transaction quickly evolves into an intense love affair.

The ethical conundrum that lies at the heart of the story comes into focus when Tom’s dystopian, anti-capitalist novel brings him a prestigious prize. Serena is caught between her handlers’ distaste for Tom’s literary product and her fear that the truth of what brought them together will be exposed, disgracing him and abruptly ending her career. As she gropes for a way out, it becomes clear she’s as much a creator of fictions as her lover.

Alongside his engaging plot McEwan does a capable job sketching a portrait of Britain’s bleak economic and political circumstances in this era. The country reels from the shock of the Arab oil embargo, the damage compounded by labor unrest in the coal-mining industry. To conserve scarce energy Serena’s work week is reduced to three mind-numbing days in a damp, chilly office. McEwan also pokes gentle fun at the desiccated quality of the spy game of the time, reduced long before the fall of the Berlin Wall to little more than bureaucratic wrangling, while the looming threat of terrorism is glimpsed dimly at best.

In her reading, Serena longs for “characters I could believe in,” hoping “to be made curious about what was to happen to them.” McEwan has supplied a worthy collection of such characters in Sweet Tooth, a spritely portrait of the malleability of fact and fiction.

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