MPs will be prevented from taking on second jobs that fail to meet a new test of putting constituents first, under government plans to “turn the page” on an era of sleaze and scandal.

Despite growing anger over MPs doing lucrative outside work while also serving their constituents, the new Labour government will not ban second jobs but will severely restrict lobbying work.

Ministers say they will close loopholes that allow MPs to take on additional paid lobbying or advisory roles as long as they relate to policy or how parliament works.

There will be carve-outs for MPs who need to keep professional qualifications up to date, including nurses or doctors, and for those who wish to pursue speaking, writing or media presenting roles, they said.

In an interview with the Guardian, Lucy Powell, the new leader of the Commons, said the government wanted to urgently “change the tone” on parliamentary standards after years of poor conduct that had undermined faith in British politics.

“Part of that is turning the page on that era of sleaze and scandal and cronyism and bad behaviour that then actually just became a plague on all our houses,” she said. “It wasn’t totally focused on the Conservatives … we saw that in the election campaign, we all heard that on the doorstep.”

On Wednesday, Labour will lay a motion to set up a new cross-party modernisation committee, chaired by Powell, designed to change outdated Commons procedures, drive up standards and improve working practices.

The measures fall short of a previous Labour commitment, dropped by Keir Starmer in 2021, to forbid MPs from taking any second jobs. However, they deliver on his manifesto pledge for an immediate ban on politicians doing paid advisory or consultancy roles, by closing loopholes.

Powell said there were “a number of high-profile cases in the last parliament of MPs taking those paid advocacy roles which were quite clearly related to their duties as an MP. So we’re going to remove both of those exemptions.” MPs will have three months to get their affairs in order.

Powell said the government wanted to go further on second jobs, but suggested there were no plans to put limits on the amount of time MPs could devote to outside work or how much they could earn. MPs made a total of more than £17m from outside work during the last parliament, analysis by Sky News and Tortoise Media showed last year.

Boris Johnson was the biggest earner, declaring £4.8m in earnings from speeches and writing, followed by Theresa May, who earned more than £2.5m, while David Lammy, who is now the foreign secretary, was the highest-earning Labour MP, with an income of £238,000 over three years from outside work.

“What I think we need to look at is meeting that commitment of putting your constituents first, being seen to put your constituents first, this being your main focus, and eradicating any perceived conflict of interest,” Powell said.

The modernisation committee will drive strategy for parliamentary conduct and oversee the existing standards bodies but will not replace them or take on an operational role. It will be set up before the summer recess begins at the end of July.

Powell said she wanted senior Conservative and Liberal Democrat MPs to sit among its 14 members. “We could just do these things by diktat but I don’t want to do that. I want to take the house with us and try, where we can, to find consensus.”

The committee could also play a role in how to handle MPs under investigation for serious criminal offences. Before this month’s election, a move to ban them from the parliamentary estate on arrest was passed by just one vote.

There are no plans to name MPs in those circumstances. “The reality of an MP being arrested for something serious and that staying out of the public domain these days is nigh on impossible. Should there be a case where that’s not happened and it’s in the public interest, we’ll take a look at that point.”

Powell said she had concerns over the culture of parliament, which had been “very difficult” in recent years. She suggested the large intake of new MPs created an opportunity to move on. However, she said she had no plans to close any of the bars.

In the longer term, Powell suggested, the committee could also look at gifts and hospitality to MPs and the rules around declarations. “If there is a sense at all that people are getting around the spirit of the rules, then that is what we will look at,” she said. “We need to make sure we’re meeting that public smell test.”

Labour has pledged to set up an ethics and integrity commission within its first 100 days but it is unclear whether that would be put on a statutory footing, meaning it could be unpicked by future governments.

“There’s quite a few areas like that we’re looking at where perhaps later in a parliament … you might want to put on statute. They’re not necessarily legislative priorities for today,” Powell said.

While the government’s plans for ministerial ethics are not in Powell’s remit, she said Starmer was taking the issue “very seriously” and would “clamp down” on any potential conflicts of interest, with anybody breaching the ministerial code “losing their job straight away”.

The prime minister has already given his ethics adviser the freedom to start his own investigations, although Starmer will still get a final say. It remains unclear whether Labour will ban former ministers from lobbying the government for five years, as previously promised.