The distributor hall sensor does not switch when connected to the engine. When I slowly hand turn the engine the voltmeter at the correct ignition switch amplifier terminals just shows a flat 10v. The rotor arm moves normally.

If I disconnect the distributor from the engine and turn the rotar arm then the hall sensor does switch in the correct fashion, 4 times a revolution.

So what casuses this fault?

There is some oil in the distributor as if you remove the rotor arm the cam is wet with oil. I have GTX Magnatec oil and could the magnetic oil inside the distributor effect the hall sensor?

Last year I had to change the timing belt and oil pressure sensors as these were damaged by oil leakage due to a blocked engine breather.