Taoiseach Enda Kenny said in Derry today he does not believe the formal resignation of Dublin West TD Patrick Nulty from the Labour Party would have any bearing on the Coalition.

“I don’t believe it will,” he said when questioned on the margins of a British-Irish Council meeting in Derry this afternoon on whether Mr Nulty’s resignation and those of two Wicklow councillors would damage the Fine Gael-Labour Coalition.

The Government, he said, would adhere to its economic policies.

“The deputy resigned from the Labour Party before. He has not been an avid supporter of the Government,” said Mr Kenny.

“The Government has a very clear programme for government that we have to implement: to sort out our public finances, get our people back to work, and I am glad to say we are making solid progress in that regard,” added Mr Kenny.

Mr Nulty formally left the Labour Party this morning after being outside the parliamentary party since December 2011. Mr Nulty said being a party member no longer assists him in advancing his political beliefs.

Chairman of Wicklow County Council Tom Fortune and Wicklow councillor Barry Nevin this morning also announced their move at a joint press conference, due to what they say is the party’s loss of “credibility”.

‘Not surprised’

Labour leader and Tánaiste Eamon Gilmore told reporters he was “not surprised” at Mr Nulty’s announcement. Mr Nulty “effectively” resigned some time ago” Mr Gilmore said. “He is effectively an opposition TD, even shortly after his election in a byelection,” Mr Gilmore said.

He said the party had a “job of work to do” to turn around the economy . “The vast majority of the public representatives of the Labour Party have the courage to see that through,” he said. “ I’m not all surprised at this decision,” he added.

Mr Nulty was expelled from the parliamentary party for voting against the budget after six weeks as a TD.

In a statement released this morning, Mr Nulty said Labour leaders had brought the whole political system into disrepute.

"I still have great regard for the many decent, hardworking Labour members, supporters and public representatives who share my thirst for a better Ireland, " he said.

“ However, the leadership of the party and in particular the Cabinet Ministers who have sacrificed core social democratic demands for their own personal political ambitions have brought the entire political system into disrepute.

“Trust in our political system with citizens has been broken. That means there is a need for new ideas and social movements that are accountable to citizens, not powerful interests.”

Mr Nulty said the recent announcement that children with special education needs will not receive the resource teaching hours they require from next September was the most recent example of vulnerable members of society being hit hard.

“ We have personal insolvency guidelines published which seek to micro-manage the personal finances of hard-pressed families, and we have seen cuts to child benefit which Labour had sworn to protect,” he said.

“These are not the actions of a party that is acting in the interests of working people and a just economic recovery. That is why I have resigned. I am optimistic about the future of our country and I will continue campaigning for the radical change that is needed.”

Cllr Tom Fortune said the party had “totally lost touch with councillors and with the public, their credibility is gone”.

The Labour Party had “lost their way” and the councillors had taken the action after attempts by them and three other councillors to communicate with leadership over the past number of months were “fobbed off”, he said.

In a joint statement the councillors said they “no longer believe that the party holds compatible values ” with them and could “ no longer align” themselves “with the party’s actions”.

“In our view there seems to be an unacceptable centralisation operating within the party that is anti-democratic in its nature.”

“ We have come to the conclusion that the party leadership are no longer interested in genuine dialogue and hearing the issues of public concern that public representatives needed to get answers to,” they said.

Cuts in education support for special needs students were the “final straw” and” a culmination of issues hitting the most vulnerable”, they said.

Property tax and water charges were “against” core Labour values, they added.

“ We believe the Labour party has lost touch with the people they promised to represent, they have reneged on these commitments,” they said.

They would continue to serve and “work tirelessly” on behalf of the people of Bray and Greystones, they added.

European budget

Mr Kenny, when later asked about the prospects of agreement on the European budget before the end of the Irish presidency at the end of this month, replied, “It’s not over the line, it’s close to the line, and this may well go close to the line through next week.”

He said major progress was made in the last three or four days but the budget was not finally completed. “I hope that it can be signed off on before the end of next week.”

Asked whether he thought the budget would be agreed, Mr Kenny said, “Europe always says ‘No’ until it says ‘Yes’, and these things have a habit of going to the end line on a recurring basis. I hope that this time, when it does get near the end point, that agreement can be reached and everybody signs off on it. It’s important for 500 million people.”

Mr Kenny said that in relation to harmonisation of corporation tax between North and South that it was a matter for the British government, and “our Government will not object to that”.