Easier fix
Thanks to those above who suggested this fix. It was very useful, but I think there is an even easier to correct this. You don't need to remove the Exchange account. Here is what I did to fix this.
1) Removed data from Calendar, Calendar Storage, Calendar Sync Adapted and Calendar Widget (basically anything with Calendar in) using Manage Applications under Settings/Applications.
2) Opened Settings/Accounts & Sync/Exchange Active Sync and unticked Calendar sync.
3) Did a "Sync now" which therefore just sync'd mail and contacts.
4) Ticked "Sync Calendar"
5) Did a "Sync now" which sync'd mail, contacts and calendar.
Problem had gone away. I actually believe this is a problem with the Exchange Activesync profile as something pretty similar used to happen on my Nokia (which uses Activesync, as does iPhone) and I used a similar method to fix this but I can't be sure of this.
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