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The House of Lords reviews legislation from the House of Commons but because it's unelected it's powers though real are limited. Effectively the United Kingdom has single chamber government which seems to suit Britain.
The Lords are divided into the Lords Spiritual and Temporal. Lords Spiritual are lords by virtue of ecclisiastical positions, they're Bishops of the Church of England. There can be no more than 26 Lords Spiritual at any one time. Lords Temporal include Lords as one might expect - hereditary peers, those with titles held by families often dating back centuries, as well as life peers, who are created by the queen, on the advice of the prime minister. Life titles cannot be inherited, although their children have the same right to be addressed as "The Honourable..." as the children of hereditary peers who haven't yet inherited their parent's title. The government of Tony Blair kicked out most of the hereditary peers and then created more life peers than any government in history, seemingly in an attempt to stack the Lords in his favour.