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Written in 1978, Chris Rea wrote the lyrics on a difficult car journey home to Middlesborough (UK) from London. He was traveling back with his wife when they got stuck in traffic while snow was falling. Rea commented that he looked at other drivers and they "all looked so miserable", so bemused, he started to sing, "We're driving home for Christmas", and the lyrics flowed from there. The music to the lyrics came several years later and the track was first released as a B-side to "Hello Friend" in 1986. It was subsequently re-recorded to become the modern day Christmas classic.

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