Artificial intelligence (AI) could help British businesses offset the soaring costs of recent Budget measures by boosting productivity, Google’s UK boss has said.

Debbie Weinstein, vice-president and managing director for Google UK and Ireland, said companies facing surging costs from higher national insurance contributions and the national minimum wage hike announced by the Chancellor last month can use AI to “run their businesses more effectively”.

Fears are mounting that firms will have to put up prices and axe staff in response to the extra costs from the Budget moves, while the increasing use of AI is already seen by many workers as a threat to jobs.

But Ms Weinstein told the PA news agency that AI is a way for firms to boost the productivity of their existing teams and spur on growth, which will help counter the cost pressures they face.

Google believes that AI could help the average UK small firm boost their productivity by 20%, effectively adding an extra digital employee to a team of five.

She said: “Driving productivity and making sure you’re making the most of your employees is really important for businesses.”

Rather than firms using AI to cut their workforces, she said: “What we’re seeing right now is that people are using AI to enhance the work of their existing teams and allowing their team members to do more activities.”

She said: “It’s not about costs, but more productivity from existing staff.

“The people in those teams are able to drive more growth for those businesses.”

But she added: “I acknowledge the fears that people have about ‘how will it disrupt the job that I’m doing today?’.

“The research we have is that most jobs will be augmented by AI.”

She said that workers are not competing with AI, but instead competing with others who can “use AI better” in their job.

Google is running a pilot with small firms to help increase the take-up of AI within workforces, using behavioural science to help drive the programme.

It has teamed up with small firm support platform and membership community Enterprise Nation, the Grind Coffee chain and behavioural science expert and London School of Economics professor Grace Lordan for the three-month project.

The initiative will see it offer 750 workers across small firms a free programme designed to train them in the use of AI in their everyday work.

Ms Weinstein cautioned that small businesses risk being left behind in the adoption of AI due to a lack of training and time invested in helping their staff use new tools.

Ms Weinstein said: “Many of these businesses are made up of lean teams with global ambitions that could use AI to help level the playing field, but only if their teams are equipped with the skills needed to harness the power of this technology.”