British flags
In March 1603 Elizabeth I of England died without an heir, leaving the succession to the Crown open. Elizabeth's Ministers chose to ignore Henry VIII's will which would have made his younger sister Princess Mary's great-grandson, Edward Seymour - Lord Beauchamp, King, and instead invited James VI of Scotland to accept the Crown of England.
The two countries remained independent under a single Monarch, James VI and I, who called his new realm the Kingdom of Great Britain (after the name of the main island of the British Isles on which lie England, Scotland and Wales).
In 1606, following some altercations over flags between English and Scottish ships, James VI and I issued the following proclamation:

James VI and I's proclamation
The exact design that accompanied this has been lost. Several designs are known to have been considered including quartering the flags of England and Scotland (as the Royal Standard is quartered) and putting the two side-by-side, but the chosen design was:

The 1606 Union Flag
Some Scots vessels used an unofficial version where the St. Andrews's cross went over the St. George's cross. The width of the white line (or fimbration) around the St.George's cross has also been a matter of debate. Actual flags from the period suggest that the fimbration was quite wide. The shade of blue started as a sky blue, but gradually became darker over the centuries. The modern Scottish Saltire retains a lighter blue background than the Union Flag (Pantone® 300 for the Saltire versus Pantone 280 for the Union).
In 1634, after some disputes concerning saluting ships in the Channel, Charles I partially repealed his father's proclamation:

Charles I's proclamation
To this day civilian vessels are not permitted to use the Union Jack. They have their own Jack (a white bordered Union Jack) and the courtesy flag is an appropriately coloured ensign (red for civil vessels, blue for government vessels, and white for naval vessels).
The execution of Charles I on the 30th January 1649, brought an end to the union of England and Scotland. The Union Flag no longer made sense so the English Parliament ordered the Admiralty to chose a new design. This was to be the first of several design used until the restoration of Charles II in May 1660 restored the pre-1649 flags.
In 1707, Queen Anne completed the task that James had started - a complete union of England and Scotland. The first article of the Treaty of Union stated that the flag would be the crosses of St. George and St. Andrew conjoined in such a manner as the Queen saw fit. Queen Anne decided to keep the existing design.
Up until 1801 Ireland had been a separate kingdom. In 1800 an Act of Union was passed to create the new United Kingdom of Great Britain and Ireland, to come into effect on the 1st January 1801. The College of Arms designed a new flag with the Cross of St. Patrick counter-changed with the Cross of St. Andrew. The inclusion of St. Patrick's cross is of interest as St. Patrick was not martyred and therefore did not have a cross. The red saltire on white was the emblem of the powerful Irish Fitzgerald family and was a convenient symbol for Ireland:

The 1801 Union Flag
Over the years the shape of the flag has gradually changed to its current proportions of one to two. This was caused by a steady decrease in the width of the cloth used to make the flags. The specifications were in the form of so many widths high by so many yards long. This meant that as the width of cloth reduced the flag apparently became longer and longer:

The 1:2 Union Flag
The independence in 1921 of the southern part of Ireland as the Irish Free State (now the Republic of Ireland) did not result in any change to the Union Flag, although this was discussed at the time.
In 2008 the Flag Institute started a campaign to have the 3:5 version of the flag used for all official (and unofficial) purposes. This was not a new idea. It was in 1687 that Samuel Pepys, when Secretary of the Admiralty, declared that flags (and he was referring to flags at sea) should be in proportion 11:18. It is no accident that this is very close indeed to the Golden Ratio (1:1.618034). This was restated in 1938 by Garter King of Arms when he declared that flags on land should be in proportion 3:5 (3:5 is very close to 11:18). The Flag Institute wished only to re-style the flag in its original proportions. During the year discussions took place with (inter alia) the College of Arms, the Lord Lyon King of Arms, the Department for Culture Media and Sport and the All Party Parliamentary Flag Group†. The reversion of the national flag to the proportions 3:5 also has the obvious benefit of making the it the same shape as the flags of the constituent nations and counties of the United Kingdom. The British Army always retained the 3:5 version. A Union Flag Bill was sponsored by Andrew Rosindell MP and presented to parliament.
† The All Party parliamentary Flag Group (APPFG), under the chairmanship of Andrew Rosindell MP, was inaugurated on 5 February 2008. The Group contains MPs and Peers from all parties whose common theme is an interest in our nation's flags.

The 3:5 Union Flag
Graham Bartram FFI, Chief Vexillologist of The Flag Institute
Further reading
Available in the public area of the Flag Institute web site:
The Union Flag or the Union Jack?
The Union Flag Bill 2008
Exclusively available in the Members' Area:
Development of the Proportions of British Flags
Table of Flag Proportions
Comparison of Ratios
Flags on Land
If you are already a member: get more information on access to the Members' Area
If you are not yet a member, get more information on membership or join online now
Church Pamphlet
'Flags on Churches', the Institute's guide to flying flags on churches, is available to order online.
