wp editor not preserving formatting?

Hi,

site: http://www.abiggersociety.com

I've been struggling with this for a bit now. The wp editor is not preserving any of the line breaks / formatting etc when going from visual to html. It does however insert nbsp characters in place of line breaks.

I've switched off all the plugins and i think it's the subway theme itself which is at fault but i don't know where to begin to try fixing it. Please help?

Kind Regards

Jawad Yaqub