British Naval Flags

In the Royal Navy the ensign has a red, white , or blue background ground with the Union Flag in the upper corner .Until 1864, ships of the Royal Navy were divided into three squadrons (red, white and blue) and flew the corresponding ensign to indicate the squadron to which they were assigned. 

  However the use of different colors often led to mistakes, Lord Nelson, on going into action at Trafalgar, ordered the whole of his Fleet to hoist the white ensign; and it was under that flag, the "Old Banner of England" but with the Union in the upper corner, that the victory was gained. Since 1864 the white ensign (further distinguished by having a red St. George’s cross quartered upon it) has been reserved for use by the Royal Navy and by the Royal Yacht Squadron, the blue ensign is reserved for British merchant ships commanded by officers of the Royal Naval Reserve after obtaining permission from the Admiralty. The blue ensign is also used by some yacht clubs with a formal designated "Royal" status. Those ensign are called "defaced" as they each have an added signal differentiating it from others. Finally the red ensign is flown by all other ships and vessels belonging to H.M. subjects.