Hidden Credit Liabilities: Role of the FCA

David Chadwick Excerpts

Tuesday 14th April 2026 Westminster Hall

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

It is an honour to serve under your chairship, Sir Roger. I thank the right hon. Member for Hayes and Harlington (John McDonnell) for securing this vital debate.

I have tried to support the Evans family, my constituents, since I first became an MP, carrying on the work of my predecessor Roger Williams, who was here until 2015. I have got to know Don, Rachel and Paul and their circumstances quite well, and Paul is here with us today. The Evans family have suffered as a result of shocking banking malpractice, and I hope and believe that we have a Minister here today with the professional expertise and intellect to understand what the banks did and put things right.

Don Evans led a family firm in every sense: his wife, two daughters, son, son-in-law and granddaughter all played a part. Springdew Ltd, a pharmaceuticals company, was the kind of firm that made its employees and the wider upper Swansea valley community part of an extended family. Customers included Procter & Gamble, Pfizer, Johnson & Johnson and GSK. In 2007, the business became GSK’s supplier of the year.

Unknown to the Evans family, Springdew was originally put into a 10-year structured collar by Barclays Capital in early 2006 for a notional amount of £800,000, allegedly rolled into an interest rate swap with a notional value of £1.3 million, with Springdew paying the fixed rate of 5.6% for an excessively long period—15 years. The bank was highly motivated to make the term so long because it had secretly added a hidden margin of circa 60 basis points to the swap rate, bookable as a day one profit of circa £85,000. That interest rate swap was included in the 2012 interest rate hedging products remediation process. Barclays stated that the product had been mis-sold and a full tear-up was agreed, with the Evans family refunded moneys paid plus statutory interest.

However, the bank refused to engage with Springdew’s claim for consequential losses, and the hidden credit line had damaged its credit standing, leading to transfer to Barclays’ business support unit, where additional fees were charged. Its experience in the business support unit included manipulated interest rates, false reporting, a refusal to suspend payments, personal and pension funds being injected and forced equipment sales. The hidden credit line also meant that the bank was unwilling to provide additional lending to support growth. The bank has since refused to disclose key internal documents promised in the guide to the review in November 2012. As a company rather than an individual, Springdew has no legal right to a data subject access request, so reform there is desperately needed. If businesses cannot access disclosure from the other side, they are fighting blindfolded. We also need to regulate business lending properly. The world of SME finance should not be the wild west.

The business had been flourishing, but the bank’s behaviour brought all of that to an unnecessary end. The family invested a further £600,000 of their own money to keep the business afloat—money that is now with creditors. Springdew was the last major employer in the upper Swansea valley, providing much-needed jobs. I must stress that when businesses are destroyed through banking misconduct it is not just founders and shareholders who suffer, but employees and the wider community too.

The stress has had direct medical consequences. In 2011, Don suffered a perforated ulcer and was hospitalised for a week. In January 2024, a month after Springdew began liquidation, Don suffered a major stroke. He was discharged early on a Friday due to his wife’s deteriorating condition; that same night she was hospitalised with pneumonia, an illness that can be brought on by sustained stress. The situation worsened when the family learned that she had cancer, which she had kept secret, not wanting to add to the family’s burden. Although the financial consequences have been devastating, the greatest losses have been of health, of time and of life; one of Don’s daughters also sadly passed away.

The Fraud Act 2006 defines three types of fraud: false representation, failure to disclose information and abuse of position. The Evans family believe that they have been the victims of all three. There was a brief glimmer of hope for justice when the Business Banking Resolution Service was established, but the guilty banks engineered ways to deem Springdew ineligible, as they did with the vast majority of claimants, with a staggering 76% of claimants being turned away. The family were then diverted to the Financial Ombudsman Service, which was an equally unsatisfying experience.

There are clear systemic failures in how financial injustices are handled. The Financial Conduct Authority’s purpose is to regulate financial services, set standards and hold those that fail to meet those standards to account. Clearly, it has failed to help the Evans family and so many others. The FCA deliberately excluded key features of derivatives and consequential losses from its remediation exercise, and direct correspondence with chief executive officer Andrew Bailey and chair John Griffiths-Jones produced nothing meaningful. Springdew relied on a system it was told to trust. It was misdirected by official process, suffered catastrophic personal and financial harm, and followed the rules throughout.

My constituents have been victims of serious banking misconduct and have been terribly let down. As far back as 2014, Parliament made a commitment to the Evanses and others like them that their cases would be reviewed and that fair and reasonable redress would follow. That commitment has not been honoured. Justice is long overdue, and I urge the Minister to relook at the Evans case and the others raised today and commit to ensuring that those businesses will finally benefit from a redress scheme that will provide true compensation and fairness.