'Only millionaires will pay death duties' Tories in Blackpool.

THE TORIES yesterday promised to free many families from death tax and first-time buyers from stamp duty - but experts warned the proposals could damage the region.

Shadow Chancellor George Osborne said a Tory Government would raise the threshold for inheritance tax to pounds 1m from pounds 300,000, benefiting nine million families and ensuring "only millionaires pay death duties".

He confirmed stamp duty on properties worth up to pounds 250,000 would be abolished for first-time buyers, with the pledge paid for by a pounds 25,000 levy on wealthy foreign businessmen benefiting from existing tax breaks.

Hexham's Tory MP Peter Atkinson said the proposals would be welcomed by many of his constituents.

"These are two very good points which illustrate the direction the Conservative party is going to take when it is in Government and shows we are committed to reducing the tax burden which has grown so much in the last 10 years," he said.

Research by the Tories shows Castle Morpeth, Penrith, Alnwick and Tynedale could benefit from the inheritance tax proposals - although most of the beneficiaries will be in London, the South and the Midlands.

But influential think-tank IPPR North warned the inheritance tax changes could worsen a North-South housing wealth divide, with few people benefiting when average house prices in the North-East are more than pounds 100,000 lower than in the South-East.

It added that the region's development could be damaged, with many entrepreneurs using inherited wealth from property to start new companies because most private sector investment goes into the South-East.

North-East minister Nick Brown said: "I am sure his speech will please other wealthy privileged Tory boys like himself. It is the old Tory message of more money for the rich and nothing for anyone else."

Chancellor Alistair Darling said Mr Osborne had made a pounds 3.5bn tax commitment but claimed it was "impossible" for him to raise the cash he needed.

CAPTION(S):

PAT ON THE BACK: David Cameron, congratulates shadow Chancellor George Osborne, after yesterday's speech.