Ignition/spark ST50

From what Waynus said the neutral switch only lights the bulb in the speedo and does not stop you starting the bike in gear.
Therefore I would say the switch might be faulty but not causing the lack of spark.
Is it definitely an ST50 engine? You can check by the numbers near the gear selector, it should be st50-xxxxxx

So you have tested the generator with a bulb and got a flashing light when kick starting? (Generator ok)
And you say you got a spark when you jumped the coil directly from the battery? (Coil ok)

If that's the case it sounds like bad wiring loom / bad earth.
Try running a wire from the negative of the battery and connecting it directly to the ground of the coil to see if that helps.

Good luck

Blue and Waynus , Many thanks for your help I followed your instructions and traced the fault to the earth on the coil and the ignition switch I now have a very healthy spark and have had it running for \ few sec`s but I now need a carb kit due to some leaks , I will keep you all up dated and will post some pictures of the bike when its finished (just waiting for a seat)