Krileon,
It has been thus why i asked the question, we have found a fix, i have created an auto action, that when a member is banned two things happen, one they are moved into the user group 'Banned' and then we have a newsletter subscription feature, we update this to 'Do NOT email me newsletters'
This has effectively fixed the issue.
Bit of a work around, but because we cannot check if a user is blocked or banned within the mailer this was the best solution