Not a new controversy at all and I think plenty of precedent for playing any of the different versions - see from the wiki entry below. Shane McGowan's take is particularly interesting (and reflects what I have always thought about it - it's authentic to the characters in the song). Also interesting that originally the word 'arse' was seen as worse that 'slut' and 'faggot' - whereas now, no one cares.
Lyrical controversy and censorship
The song's lyrical content attracted attention from the start due to language contained in its second verse, where MacGowan's character refers to MacColl's character as "an old slut on junk", to which MacColl responds with a tirade that includes the words "faggot" and "arse". When the song was performed on Top of the Pops on its initial release, the BBC requested that MacColl's singing of "arse" be replaced with the perceived less offensive "ass".[21] During a live performance on Top of the Pops in January 1992, MacColl changed the lyrics further, singing "You're cheap and you're haggard". When Katie Melua performed the song with the Pogues on CD:UK in December 2005, ITV censored the word "arse", but left "faggot" uncensored.[22]
On 18 December 2007, BBC Radio 1 edited the words "faggot" and "slut" from the track to "avoid offence". MacColl's mother described the ban as "too ridiculous", while the Pogues said they found it "amusing". The BBC stated, "We are playing an edited version because some members of the audience might find it offensive".[23] The BBC later announced they had reversed their decision and continued to play the song uncensored.[24] Other BBC radio stations, including the traditionally more conservative Radio 2, had continued to play the original version throughout this period, the ban having applied to Radio 1 only. The MTV channels in the UK also removed and scrambled the words "slut", "faggot" and "arse" from the song.
In December 2018, two broadcasters on Ireland's RTÉ2 pop music station caused controversy by asking for the word "faggot" to be bleeped from broadcasts of the song. RTÉ announced that they would not censor the lyrics.[25] Some days later, MacGowan defended the lyrics in a statement released to Virgin Media Television's The Tonight Show:
The word was used by the character because it fitted with the way she would speak and with her character. She is not supposed to be a nice person, or even a wholesome person. She is a woman of a certain generation at a certain time in history and she is down on her luck and desperate. Her dialogue is as accurate as I could make it but she is not intended to offend! She is just supposed to be an authentic character and not all characters in songs and stories are angels or even decent and respectable, sometimes characters in songs and stories have to be evil or nasty to tell the story effectively. If people don't understand that I was trying to accurately portray the character as authentically as possible, then I am absolutely fine with them bleeping the word, but I don't want to get into an argument.[26]
In December 2019, BBC Radio Solent radio presenter Alex Dyke announced on his Twitter account that he would not be playing "Fairytale of New York" on his show, calling it a "nasty, nasty song" and "an offensive pile of downmarket chav bilge".[27] Other journalists have also criticised the song's lyrics.[28][29]
In November 2020, the BBC again announced that Radio 1 would play a censored version with the words "faggot" and "slut" removed, while Radio 2 would play the original, and 6 Music presenters would each decide for themselves which version to play.[30] In response musician Nick Cave accused the BBC of "mutilating" the song, stating it would be "stripped of its value".[31] Meanwhile, The Pogues' official Twitter account responded to Laurence Fox's call to get the original to the top of the charts and "#DefundTheBBC" with, "Fuck off you little herrenvolk shite"[32]
On 19 November 2020, PinkNews journalist Josh Milton described the seemingly annual argument over whether or not the use of the word "faggot" was offensive as "Britain's worst festive tradition".[33]
In December 2020, an alternative version with MacColl singing "you're cheap and you're haggard", replacing the contentious line, was included in the compilation album TikTok Christmas.[34][35]