The UK coalition government plans to reform the House of Lords and make it directly elected for the first time in history. The idea is backed in principle by all three major parties, and has been on the cards for 100 years. It was an issue in the last 4 general elections, but was pretty much swept under the table after the election was over. This time since the Lib Dems are in government they're really going for it,
it's been put into a draft bill and the first election is meant to be in 2015 if it passes.
How the House of Lords currently works
Lords are appointed by either the Prime Minister, or the House of Lords Appointments Commission. Lords may be appointed at any time, so there is no fixed number of them; there are currently nearly 800 Lords. Most Lords are life peers - they will remain in the House of Lords until they retire or die.
The Lords carry only a suspensory veto - if they reject a Bill, it's delayed by a year, after which the House of Commons can use the Parliament Act to overrule the Lords and enact the bill anyway.
The coalition's proposal
The government plans to cut the House of Lords to 300 members, 80% of whom will be directly elected, and the remainder appointed in the same way as before. The Lords will serve single 15-year terms, with a third of them up for election every five years. They will be elected using the
single transferable vote, a form of proportional representation. Their powers won't be changed at all - they can still be overruled in the same way.
Labour supports the reforms in principal, but there have been calls for a referendum on the issue, which the government rejects.
Other proposals
Obviously many would prefer a 100% elected House of Lords. Another idea is to remove the upper house entirely and use a unicameral system, since the Lords hold no practical power anyway.