OK Took it back off today and when moving handle the arm was moving as it should, I took it back to shop just to get second opinion and mechanic tried it and said it was working perfect, did not have the old one to compare but I'm certain there identical. all he could suggest was using the spacer but told him that my old one did not have one on. Put it back on for now but did notice when it was off that as soon as pressure is pushed on arm as in pushing it inwards the handle does nothing when priming, when no pressure you can feel and see the arm moving. Tried holding it in place with spacer on and arm in the block but it did no pump diesel up, when I fitted it back on just before I nipped bolts up tight arm was moving with primer but once bolts were nipped fully in back to nothing again.
I must be doing somhting wrong or maybe I do need the spacer.
Use the spacer see what you get.