The King in this song is the wren of St Stephen's Day, the Cutty Wren, hunted and put on a pole or carried in a cage. So the red ribbons aren't so nice.
The harmonies are nice.
Sir James Fraser thought the custom was ancient, pre-Christian, and related to the human sacrifices at the close of the year, the Winter Solstice. Others thought it had to do with the Peasant's Revolt of 1381*. There isn't any evidence for these, as the custom is not recorded until the late 18th C, but both have a plausibility, anyway.
Chumbawumba went with the political spin, predictably.
*The Peasant's Revolt was mostly in East Anglia, with lots of trade connections across the Channel, and among the people who would provide most of the antimonarchist Puritans a few generations later.