I'm not legally qualified, but doesn't a dealer have to supply a car that is both safe and fit for purpose under the supply of goods legislation?
A rack that is 'on the way out' may not be presently unsafe, but may shortly become so. I would ask the dealer to meet you half way on the cost of replacement as a goodwill gesture, but be prepared to accept his offer of 30pc - it's better than nothing.
It seems that he is prepared to accept responsibility for the handbrake, which is as it should be. My question to him would be why is it not working? Was it supplied in that condition? If so, why? Did you test drive the car prior to purchase? Did it come with a valid (preferably new) MOT?
There ARE steps that you can take if you are not satisfied, but as 'Tannaton' suggests, this can be problematic. Much will depend upon your determination and resolve.
Regards. John.
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