Except for the slight change caused by the insertion of the Irish Saltire in accordance with the Royal Proclamation of 1st January, 1801, on the legislative union of the Irish Parliament with that of Great Britain, no further change in the design of the three ensigns has taken place, though the shape has been gradually altered from a proportion of roughly 5 by 4 to that of 2 to 1. By Order in Council of 9th July, 1864, the squadronal use of the ensigns in the navy was abandoned, and the principal ensign, the red, was made the exclusive property of the Mercantile Marine, which had shared it in common with the navy since the time of Charles I. The second ensign, the white, was retained for H.M. ships, and the third—the blue—assigned to the Naval Reserve, then recently formed, and to ships belonging to the Civil Departments of the navy and other departments of State.

The reason for this change is set forth in the Memorial of the Admiralty Board to the Council in the following words:

The Flag Officers of the Fleet, whether Admirals, Vice-Admirals or Rear-Admirals, are classed in Squadrons of the Red, White and Blue, and are (with the exception of the Admiral of the Fleet) authorised to fly their Flags of the colour of the Squadron to which they belong, this regulation necessitating the adoption of ensigns and pendants of a corresponding colour in every ship and vessel employed under their orders, each vessel is therefore supplied with three sets of colours, and the frequent alterations that have to be made when the Fleet is distributed as at present, under the orders of many Flag Officers, is attended with much inconvenience from the uncertainty and expense which the system entails.

The increased number and size of merchant steamships render it a matter of importance to distinguish on all occasions men-of-war and private ships by a distinctive flag; the latter vessels bearing at present the same Red Ensign as Your Majesty's Ships when employed under an Admiral of the Red Squadron. It also appears to us to be desirable to grant (under such conditions as we may from time to time impose) the use of a distinguishing flag to such ships of the Merchant Service as may be employed in the public service, whose Commanding Officer (with a given portion of the crew) may belong to the Royal Naval Reserve. We therefore most humbly submit that Your Majesty may be pleased by Your Order in Council to prescribe the discontinuance of the division of Flag Officers into Red, White and Blue Squadrons, and to order and direct that the White Ensign with its broad and narrow pendant be henceforward established and recognised as the colours of the Royal Naval Service, reserving the use of the Red and Blue colours for such special occasions as may appear to us or to officers in command of Fleets and Squadrons to require their adoption.

It will be seen that the reasons for the change given in this memorial are, first, the inconvenience and expense of keeping up the three sets of colours, and then (apparently as an afterthought) the need of a distinctive flag for the mercantile steamship. But in fact the man-of-war was already clearly distinguishable from the merchantman by its pendant and jack, a distinction that had been found sufficient for a period of two hundred years; a period during which the merchantman was, for the most part, much more like the man-of-war in outward appearance than it was in 1864. The real reason undoubtedly was that the squadronal organisation of the days when squadronal colours were first invented had become obsolete, and changes in tactics had rendered the squadronal colours unnecessary.

Before the change was made the opinions of a number of the leading admirals were taken. The majority agreed that the squadronal colours were no longer necessary and that their abandonment would be for the good of the Service. There were one or two, however, who thought otherwise, and it was pointed out that it had been found convenient during the Russian war of 1854-5 to divide the fleets in the Baltic and Black Sea by means of these colours. When Vice-Admiral Sir Charles Napier took command of the Baltic fleet he found that he and his two Rear-Admirals were all "of the Blue," and he therefore told one of them to hoist the red colours and the other the white, retaining the blue for himself, so that for this occasion the blue was the principal colour. Similarly, both Rear-Admirals in the Black Sea being "of the Red," one temporarily hoisted the white colours.

The fact that the division of fleets into red, white and blue squadrons was no longer a tactical necessity had been to some extent recognised before the end of the eighteenth century, for Howe concluded his fighting instructions, issued in 1782, with the following article:

In action, all the ships in the fleet are to wear red ensigns.

Probably this was inspired largely from fear of the inconvenience that might arise from the white ensign being mistaken for the French national flag, but the fact that Howe issued such an instruction would seem to indicate that he did not regard the squadronal colours as indispensable. Nevertheless, in the battle of the "Glorious First of June" in 1794 his fleet was divided by squadronal colours, and the 'Marlborough' suffered through having her white ensign mistaken for the French national flag, then white with a tricolour canton[314].

Shortly after this the French fleet began to fly the new tricolour flag (as at present used) which had been adopted in February, 1794, but was not supplied to the fleet until October. Thereafter there was no danger of confusing it with the white ensign, and as that was now the ensign most unlike the French flag, it was usually ordered to be flown in action by the Admiral in command. Thus on the 10th October, 1805, Nelson issued the following memorandum: