judicial precedent

A great summary of judicial precedent can be found here http://www.e-lawresources.co.uk/Judicial-precedent.php - you would do well reading this to get an overview of this topic. My comment is very summarised.

The UK operates under a common law system whereby once a point of law has been decided in a particular case, this must be followed in all future cases where the material facts are the same. It is important to recognise that only ratio decidendi and not obiter dicta of a judgement is binding.

These principles of law (ratio decidendi) may only be departed from (and thus rewritten) by courts of equivalent or higher hierarchy. For example, the Court of Appeal is bound by decisions of the House of Lords, Supreme Court, and generally by its own previous decisions. Young v Bristol Aeroplane sets out exceptions to this third category (a summary of which may also be found on e-law resources http://www.e-lawresources.co.uk/cases/Young-v-Bristol-Aeroplane.php).

The 1966 Practice statement is for the exclusive use of the House of Lords - we can see Lord Denning attempt to depart from the rule in Young v Bristol Aeroplane in Davis v Johnson, however on appeal to the House of Lords they make this clear. (see once again, a summary of this http://www.e-lawresources.co.uk/Davis-v-Johnson.php).

what is common law?

As aforementioned, common law is the system of judicial precedent - it can also be referred to as case law. Researching this should be quite easy - take wikipedia as a starting point https://en.wikipedia.org/wiki/Common_law.

As your question mentions judicial precedence, I have assumed you are not asking about the practice area.