UK chancellor Jeremy Hunt set to scrap Truss plan for investment zones -FT

Jeremy Hunt walks outside Number 10 Downing Street in London

(Reuters) -UK Chancellor Jeremy Hunt might axe plans by former UK Prime Minister Liz Truss for low-tax investment zones to boost UK economic growth in next week's Autumn Statement, the Financial Times reported on Tuesday, citing sources.

Former British finance minister Kwasi Kwarteng in September announced "investment zones" that offer businesses generous but temporary tax breaks, as well as relaxed planning rules, to encourage the construction of shopping centres, apartment blocks and offices.

Levelling-up Minister Michael Gove lobbied hard for the zones to be ditched in favor of a revamped urban regeneration policy although no final decisions have been made, the report added.

Alternatively, the zones might be scaled back dramatically and government officials told the newspaper that Hunt was expected to wipe out the project.

Hunt has put the project under review ahead of the Autumn Statement on November 17, FT said.

During Truss's premiership, the Treasury calculated the investment zones could cost up to 12 billion pounds ($13.85 billion) in lost tax revenues each year — if a strict cap was not placed on the number — because they would subsidise economic activity that would happen anyway, the report said.

($1 = 0.8662 pounds)

(Reporting by Lavanya Ahire in BengaluruEditing by Chris Reese and Lincoln Feast.)