Several possibilities:
1. The element in the hot-water cylinder has burned out. You'll need a meter to test.
2. The thermostat has gone faulty. In my experience, they tend to fail in the "on" position more often than not, resulting in water getting too hot, but sometimes they fail "off." Again, a meter is needed to test properly, but if you turn the temperature adjustment from end to end and can't hear the contacts clicking open and closed at some point, then that's a sure sign the 'stat has failed.
3. A bad connection anywhere between the timer output and the element.
4. It's unusual, but sometimes a connection unit with a fuse is used where the wiring links to the cylinder. If there's a white box next to cylinder where the cord connects which has a fuse pull-out, check/replace the fuse.
Edited to add:I don't know if its fuse or something in the hot water heater itself in the loft.
Are you sure that the heater is in the loft? That would be fairly unusual. It's usually just the cold storage cistern up there which then feeds the hot-water cylinder on the floor below.
I am thinking it can't be a fuse because the little red light is on now like is should be heating it but its not?
Unless there's a fuse between the timer and the element (see #4 above). It's unusual, but possible.
But I don't know if hot water heaters work on the same principles?
The thermostat on a simple immersion heater system is located right at the cylinder/element itself where it can monitor the water temperature and shut off power when it's hot enough.
You generally have to remove the cover where the cord connects to the cylinder to adjust or replace the 'stat. (Be careful -- Removing that cover exposes energized 240V connections if the switch is on elsewhere.)