Where do I stand

The law is simple.
They can not charge you for something they have not provided.

Now if you got covid and had to cancel it then they could charge you. But you was clearly available.
What I suspect is true is that maybe the trainers can get some reimbursment from the DVSA in regards to wasted time due to a cancelled test. But it is not down to it is on them. Maybe they are trying to get money off you and the DVSA?

I’ll try and find the apporiate legislation but if I can’t do some research into it.

Think of it like this.
If your plane trip gets cancelled due to a pilot being ill you get a full refund.
If you miss your trip due to you falling ill you get nothing.
There is quite a lot of information in regards to airplane travel, covid etc. Which although is a very seperate thing from what your doing you might find that the legislation is close enough to apply to yourself.

Whatever you do do not pay for it again and demand that you get your 2 hours training that you paid for.
Because if you pay for another 2 hours training you could end up in the exact same situation in which you get your training/test cancelled due to another covid infection.

Hopefully someone more knowledgeable then me can comment on this.