In a letter to Anthony Jenkins, seen by The Telegraph, the MPs accuse the bank of failing to tackle the “difficult and distressing problem” which they claim is “threatening the long-term viability” of hundreds of small and medium-sized companies.
The MPs call for Mr Jenkins, who was appointed only five days ago, to clarify how the bank intends to release companies from swap arrangements and to guard them from “punitive measures” if they claim compensation.
Both Labour and Conservative MPs air fresh concerns over the scandal, which was first disclosed in an investigation by this newspaper. The products were designed to protect against a fall in interest rates, but left some business owners facing costs they claim not to have been warned about.
All the MPs have constituency links to Guardian Care Homes, which is suing Barclays over claims that it acted with “reckless disregard” when it sold a set of complex derivatives. The bank says it has a claim of “far greater value” against GCH.
“We do not believe any aspect of the case has merit and are defending it,” a spokesman said.
But the lender joined Lloyds, HSBC and RBS in admitting to mis-selling some interest rate hedges to business customers in June. The banks agreed to compensate customers and to stop selling the most complicated products.
Even so, the MPs claimed that the bank had not been swift enough to act. “While Barclays, along with other leading banks, has admitted serious errors in relation to the sale of these financial products, the failure of this to be translated into action is deeply disappointing,” they wrote.
“Swap mis-selling remains a hugely difficult and distressing problem which is threatening the long-term viability of hundreds of SMEs, the majority of which are still being forced to repay loans under threat of foreclosure.”
Mr Jenkins has pledged to “stabilise the organisation” after Bob Diamond, his predecessor, resigned over the Libor-rigging scandal in July. He admitted that the bank had made “serious mistakes” in recent years and pledged to restore its reputation.
The MPs urged him to act quickly, continuing: “Clarity on exactly how Barclays intends to release such businesses from IRSAs [the swaps] and provide necessary compensation is long overdue.
“Furthermore, we urge you to reassure SMEs that they will not face punitive measures as a result of submitting a request for compensation as a result of mis-selling.” They ask the bank to prioritise cases, including GCH’s, “as a matter of urgency”.
The eight MPs are led by Emma Reynolds, the Labour member for Wolverhampton North East, where GCH has its headquarters.
Last month a court rejected Barclays’ attempt to delay hearing the GCH claim until it had been investigated as part of a Financial Services Authority compensation scheme. Judge Simon Brown QC said it was an “impossible argument” and ordered the bank to file a defence.
The claim, which is being heard at Birmingham Mercantile Court, is seen as a significant test case for thousands of businesses that could have been mis-sold the derivatives.
The FSA began a two-month review in April and found that about 28,000 businesses had been sold interest rate hedges. It said the products had a “severe impact” on some small businesses and called on banks to provide “appropriate redress”.
A Barclays spokesman said: “In line with the FSA review process guidelines, we are prioritising those clients that are in financial distress.”
• The main high street banks are under pressure from the Financial Services Authority to spell out in detail how they will prevent future IT fiascos such as the one that hit customers of Royal Bank of Scotland earlier this year.
