Welcome to Ian McConnell on Business, where each week the business editor takes the reins and gives his honest assessment of the economy and business world.

The economy has been very much in the spotlight once again in the last week at Scottish and UK levels, with a big question mark hanging over Labour’s plans to boost growth and some stellar inward investment figures north of the Border.

Chancellor Rachel Reeves made quite a big deal about the importance of persuading investors that the UK was now a stable place in which to put their money, as she claimed that some have spent the 14-year spell in which the Tories have been in power doubting whether Britain is safe in this context. The Conservatives’ time in charge has certainly been chaotic at times.

The inward investment figures, published on Thursday by accountancy firm EY, indicate that overseas companies already see Scotland as an attractive place in which to invest, regardless of the woe caused by the Tories.

EY’s latest annual Scotland attractiveness survey revealed Scotland won a record number of foreign direct investment (FDI) projects in 2023.

And the nation retained its position as second only to London among UK locations in attracting new inward investment projects.

Scotland won 142 FDI projects last year, a 12.7% rise from the previous record annual figure of 126 achieved in 2022, the survey reveals. This was the fifth consecutive year of increase, and EY noted Scotland was the only part of the UK to achieve this.

EY noted the data on FDI jobs for 2023 provides “further encouraging news” for Scotland.

It highlighted the fact that the job numbers “need to be treated with caution, as not all projects disclose employment figures”.

However, it added: “Allowing for this proviso, the fact remains that employment creation announced by FDI projects in Scotland increased by 27.8% from 5,205 in 2022 to 6,650 in 2023.”

Chancellor Rachel Reeves (Image: PA)

And EY observed: “This 2023 total represented Scotland’s highest number of FDI jobs since 2021 and second-highest in the past decade. Scotland’s employment creation from FDI in 2023 also grew faster than that for the UK as a whole, boosting Scotland’s UK share of FDI jobs from 11.1% in 2022 to 12.7% in 2023.”

There was certainly much to celebrate in the latest Scottish inward investment figures.

As my column on Friday in The Herald observed: “For anyone worn down by what often feels like a relentless stream of politically fuelled negativity about Scotland and its economy, the latest inward investment figures surely constitute a tonic.”

Ms Reeves is right to focus on the impression of investors.

My Friday column also noted: “In some ways, given the goldfish-bowl nature of Scotland’s political scene and lobbying which is at times so intense it might make people think the economy is a basket case, the view from overseas about the degree to which Scotland is attractive is so valuable because it is an entirely objective one. And it should most certainly be heeded given that talk is cheap, and foreign direct investment involves companies based overseas actually putting big sums of money into Scotland.”

Returning to Ms Reeves’ speech last week, the big unanswered question is just what is going to deliver the boost to growth that Labour has promised.

It is easy to see where such a fillip is not going to come from, given Labour has ruled out rejoining the European Union or the single market.

Rejoining the single market would, if such a move were sought and achieved, provide a very major stimulus to growth with no downside, by enabling the return of hugely valuable frictionless trade with the UK’s largest trading partner and free movement of people between the UK and European Economic Area.

Scotland’s inward investment figures show the benefits of successes on the international stage. (Image: Getty Images)

However, as my column on Wednesday in The Herald observed: “What was eye-catching, but sadly not at all surprising given Labour’s declaration that it will not take the UK back into the European Union, single market or even the customs union, was that Ms Reeves’ speech on Monday did not contain any references to ‘Brexit’, ‘Europe’ or ‘exports’. Ms Reeves did not mention the ‘European Union’ either.”

It was somewhat astounding that Ms Reeves delivered a speech about growth which did not mention exports.

This gave the impression of a somewhat insular approach by Labour. So too, of course, does Labour’s decision to embrace the Tory hard Brexit.

Scotland’s inward investment figures show the benefits of successes on the international stage.

And the nation has attracted record FDI in spite of the huge hurdles thrown up by the Conservatives’ hard Brexit.

It would be good if Labour would think about enhancing the UK’s prospects by being less insular, and rejoining the single market.

That would help the new UK Government with its goal of presiding over a major boost to growth. However, Deputy Prime Minister Angela Rayner declared in the run-up to the election that the party would “never” take the UK back into the EU or single market. This was a most demoralising declaration.

At the moment, it is difficult indeed to see anything in Labour’s policies which is going to make a major difference on growth, given Prime Minister Sir Keir Starmer and his Cabinet have also embraced the fiscal constraints which prevailed under the Tories. This will severely limit the new Government’s ability to invest for growth.

Big ambitions about boosting housing provision dramatically, which will be a huge challenge given the market and economic backdrop even if there is major planning reform, and a £7.3 billion national wealth fund are not going to be enough to make the kind of difference Labour claims it can deliver.