Business leaders have pleaded with the government not to walk away from Brexit talks without a deal after Michael Gove claimed the Confederation of British Industry supported no extension to the transition period. The CBI’s director general, Carolyn Fairbairn, said to crash out without a deal would be a “major block to recovery”. “Walking away,” she said “would worsen inequalities” and end up “damaging regional and national growth”. Her comments come after Gove told the House of Commons that the CBI was now backing the government position not to seek an extension to the transition period at the end of the year. “I know that businesses … want uncertainty to be removed. That’s why we’re clear that we will end the transition period on the 31 December, and it is a position that I also understand now the CBI is in favour of,” said Gove, who is charged with implementing the Brexit withdrawal agreement reached in January. Fairbairn, whose relations with the government were severely tested over Brexit last year, declined to respond to Gove directly. But she made it plain that British firms were too busy struggling for their survival and the prospect of going into January next year with a new trading environment with possible tariffs and customs paperwork to export and import to and from the EU was the last thing on their minds. “Walking away with no deal would be a major block to recovery,” she told the BBC in an interview. “Many businesses are not – and cannot – prepare for the impact of a no deal on top of what is happening. “The government has ruled out an extension – business have no choice but to plan on that basis.” In a separate statement she added: “Many businesses are fighting to survive as the impact of Covid-19 unfolds. A recovery plan that reaches all parts of the UK is essential. Every opportunity for growth must be seized, particularly to support young people and kickstart demand. A good deal with the EU would be a foundation stone of renewal.” The end of the transition period in December will complete Britain’s exit from the EU, bringing with it a departure from the customs union and the single market. That could mean dramatic changes for businesses, with customs declarations and, potentially, tariffs and other barriers such as border health checks on animals and food. It will also bring an end to the the freedom of British citizens to automatically reside and work in EU member states.