A bid to exempt pubcos from having to offer a market-rent only (MRO) option, as long as they significantly invest in a tenant’s pub, will be discussed in the House of Lords tomorrow.

Conservative peer and former director of Marston’s, Lord Hodgson of Astley Abbots, tabled the amendment to the Small Business Bill ahead of the final committee stage in the Lords.

The amendment states: “The Pubs Code shall offer an exemption from the Market Rent Only Option for a mutually agreed period in return for a significant investment by a large pub-owning business in that tenant’s pub”.

Labour peer Lord Stevenson of Balmacara also tabled an amendment which adds another trigger for MRO and seeks to prevent large pub companies from splitting into smaller subsidiaries in order to avoid being covered by the code.

It states: “The Secretary of State may by order infer the right of tied-pub tenants to trigger a Market Rent Only Option in the event of transfer of title or administration if in their view avoidance of being covered by the Pubs Code was a sole or significant reason for the sale or administration of that business.

“The Secretary of State may impose the provisions of the Pubs Code upon companies with fewer than 500 pubs if they are part of a group or have similar ownership to other companies which cumulatively own over 500 pubs.”

Lord Berkeley (Labour) has also sought to add a guest-beer option to the code in a new amendment, which would mean a tied pub tenant could buy one brand of cask-conditioned or bottle-conditioned beer “from any supplier at a freely negotiated price, and free from any penalty”.

The Government has added a new clause regarding disputes stating that the Secretary of State “may by regulations confer functions on the Adjudicator in connection with the resolution of disputes relating to the offer of a market rent only option”.

The Grand Committee stage is followed by the Report Stage in the Lords, before the Bill comes back to the Commons for the final chance for the Government to seek to reverse any changes the Lords have made.