Speaker's parting shot: 'Holyrood style' transparency for Westminster

In an emergency statement to MPs last night – his second following his resignation announcement earlier in the day – Mr Martin set out restrictions and curbs on the controversial second-home allowance, which has caused so much public outrage over the past two weeks.

It followed a similarly harsh statement from the Prime Minister, who said that any Labour MP found to have abused their expenses would be barred from standing in the next election.

Both measures, taken after urgent talks between all party leaders, were clear attempts to shore up the battered public trust in the Commons and show the electorate that politicians were capable of putting their own house in order.

Mr Martin was cheered by Labour MPs after he unveiled what he called a "robust" set of emergency reforms to the discredited expenses system.

The Speaker told MPs that he intended to introduce a system similar to that already in place at Holyrood, where all MSPs' receipts are published online.

He told MPs that all their claims – but not all receipts because MPs do not have to produce receipts for every claim – would be published quarterly and also that strict new restrictions would be placed on other allowances.

As an interim measure, ahead of a full review to be published later this year, MPs will now not be able to claim for a raft of items – including furniture, household goods and gardening equipment.

MPs will also not be able to claim back stamp duty paid on second homes, and Mr Martin gave them a stern warning that they had to be honest and upfront with the tax authorities, particularly on capital gains tax, which some MPs had failed to pay when they sold their second homes.

The Speaker said claims for mortgage interest or rent on second homes would be capped at 1,250 per month. He also announced proposals to "tighten up" the administration of the expenses system with a "reasonableness" test to block dubious claims.

He told a packed Commons chamber all parties were now committed to accepting the recommendations of Sir Christopher Kelly's committee on standards in public life. The party leaders also endorsed a paper produced by the Prime Minister calling for a "fundamental reform" of allowances, with regulation by an independent body.

Earlier, speaking outside the Commons, Mr Brown announced that a new Labour Party panel will be set up to investigate individual allegations of abuse of the expenses system over the past four years.

It will start with MPs Elliot Morley and David Chaytor, who were suspended from the Parliamentary party after claiming for mortgage interest on non-existent loans.

Mr Brown made it clear that any MP who had been found to have "defied the rules" would be barred from standing for Labour at the next election.

The new disciplinary process was agreed by Labour's ruling national executive committee yesterday after being addressed by the Prime Minister.

Mr Brown said he had told the Westminster meeting that the Commons could no longer operate as a "gentlemen's club" and must move to a system of outside regulation. He added that an independent outside body would need to take over the Commons Fees Office and operate a new allowances system.

He said the government would make legislative time available for the new arrangements to be put on a statutory footing.

He was pressed later on which MPs would be barred from standing and exactly how they would be judged as having "defied the rules". This is because most of the MPs who have been caught up in the expenses scandal have been following the rules of the Commons and – although some claims have appeared obscene – they have not actually broken any rules.

Mr Brown insisted he would not pass judgment on any individual MPs until they cases had been considered by the internal Labour investigative panel.

"If these people who have been suspended have been proven to have defied the rules then they couldn't be Labour candidates," he said.

Mr Brown did concede that the activities of some MPs had been "unacceptable" but he refused to condemn them any further until proper investigations had been completed.

He added: "Anybody who has defied the rules will not be a member of the parliamentary party after the next election and will not be invited to be a candidate. I mean that, but there has to be a process of examining the evidence and coming to a conclusion."

But the Prime Minister did raise further questions over the future of Communities Secretary Hazel Blears – who has retrospectively paid 13,000 in capital gains tax on a public-funded flat – by branding her behaviour "totally unacceptable".

"Hazel Blears has paid the money back," he said. "She had done so on the advice of me and other people. But she has not broken the law, she has not broken the rules."

An independent review of the expenses regime for peers was ordered yesterday by the House committee, chaired by Lord Speaker, Baroness Hayman, which is in charge of the Lords' administration.

Another TV woman steps up...

CONSUMER campaigner Lynn Faulds Wood is – like fellow broadcaster Esther Rantzen – considering standing for election following the scandal over MPs' expenses.

The former BBC Watchdog presenter said she was "open to offers. Asked whether she was considering standing as an independent, she said: "I am looking at it at the moment.

"I am open to offers, and I might go for somebody who has really milked the system and stand against them.

"Because this (the expenses scandal] must never happen again. A lot of people are not going to vote. This is awful. We have got European elections on 4 June.

"We need to vote for good MEPs, don't let the wrong people get in by default, don't let the BNP get in because we are not voting."

Her remarks came amid reports she would either run as an independent MP or ask to join the Liberal Democrats because of her high regard for her MP, Vince Cable.

Ms Faulds Wood appeared on television with fellow broadcaster and campaigner Ms Rantzen yesterday.

Ms Rantzen said she had received a "very warm" response to her proposals to stand for election against Luton South MP Margaret Moran, who claimed 22,500 for treating dry rot at her home in Southampton.