The AI Minister’s new cabinet role gives the Government an opportunity to help small firms adopt the technology with confidence, the Federation of Small Businesses (FSB) says.FSB has today published The Confidence Code: The Challenges and Opportunities of AI for Small Firms – days after Prime Minister Andy Burnham gave AI Minister Kanishka Narayan a seat at the Cabinet table.
The report found that:
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59 per cent of AI users have seen productivity gains
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24 per cent have increased their revenue
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Businesses using AI reported an average three per cent increase in revenue.
However, while AI adoption among small firms has almost tripled since 2023, 92 per cent still have concerns about issues including data security, copyright and liability.
Around a third (34%) say better guidance on implementing technology would encourage them to adopt it, while 31 per cent say support to use AI legally, ethically and responsibly would help.
The rewards, however, are substantial, and FSB figures show that unlocking deeper AI use could be worth more than £42 billion to the UK economy each year.
FSB is now calling on the AI Minister to use his Cabinet role to lead efforts across Government to deliver:
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A Government-backed Responsible AI Essentials certification scheme
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AI adoption vouchers to help businesses implement AI safely
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Clearer guidance and training through the AI Skills Hub
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Standardised AI model cards so businesses can understand how providers use their data and who is responsible when things go wrong.
Tina McKenzie, Policy Chair of the Federation of Small Businesses, said:
“FSB is calling on the AI Minister to use his Cabinet role to lead efforts across Government to deliver the changes.
“It’s great to see the new Government taking AI seriously and recognising how important it’s becoming to the economy.
“The technology is moving at pace, but too many are asking basic questions about data, copyright and liability, and they deserve clear answers.
“The new AI Minister has a real opportunity to make the UK the best place in the world for small firms to adopt AI, but that will only happen if he puts trust at the heart of the Government’s approach.
“That means giving them clear answers on who owns AI-generated content, how their data will be used, and who is responsible when things go wrong. He also should use his role to ensure small firms are not left to navigate this rapidly changing technology on their own. They must have access to practical guidance and support to help them adopt AI safely and confidently.
“If he gets it right, more small firms will embrace AI and that in turn will increase productivity. But if trust is overlooked, the UK risks holding back thousands of businesses that are ready to take the next step.”
Notes to editors
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Statistics taken from FSB’s report, published today (27 July 2026): The Confidence Code: The Challenges and Opportunities of AI for Small Firms. FSB surveyed 904 small business owners between 11 to 24 November 2025. Email press@fsb.org.uk for a copy of the report.
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The £42 billion estimate is based on a scenario in which the number of small businesses not currently using AI is halved and existing users increase their use of the technology by 50 per cent. FSB research found that businesses adopting AI in the last 12 months reported an average revenue increase of three per cent. Applying this to the Department for Business and Trade’s 2024 estimate of £2.8 trillion in UK SME turnover suggests wider and deeper adoption of AI could unlock more than £42 billion for the UK economy each year.
About FSB
FSB is a non-profit, non-party-political grassroots business organisation that provides its members with a wide range of vital business services. These include advice, financial expertise, legal support and a powerful voice heard in Government for over 50 years. More information is available at www.fsb.org.uk. You can follow us on X/Twitter: @fsb_policy; on LinkedIn: FSB UK; and on Bluesky: @fsb-uk.
