After getting hit with a great deal of negative publicity back home in London, The Sex Pistols felt like they had been trapped in a prison camp environment, so they decamped to the Channel Island of Jersey. The group was so notorious, they couldn't find a place to stay. Steve Jones and Paul Cook returned to England, but John Lydon and Sid Vicious continued on to Berlin, where they spent two weeks. The lyric was inspired by this trip, including their views over the Berlin Wall into communist East Berlin.
The opening riff bears a resemblance to The Jam's "In The City." Paul Weller of The Jam in the Uncut August 2007 issue confirmed he had a scrap with Sid Vicious in the Speakeasy Club over this song: "He started it and I finished it. I don't know if anyone can claim any victory. He just came up to me and he was going on about 'Holidays In The Sun' where they'd nicked the riff from 'In The City.' I didn't mind them nicking it - you've got to get your ideas from somewhere, haven't you? Anyway, he just came up and nutted me. So I returned it."
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