The UK will need to double defence spending over the next decade, revive its frayed democracy and become an incubator of artificial intelligence-related technologies if the country is to renew after Brexit, the foreign secretary, Jeremy Hunt, said in a major speech setting out his stall to be the next Conservative leader.

Hunt, increasingly projected as a nonpartisan strategic thinker who could defeat Boris Johnson, made the comments at the annual Lord Mayor’s banquet at Mansion House. He also said American ire at the level of defence funding in Europe was valid in the current climate.

He said: “The threat picture, so dramatically reduced at the end of the cold war, has changed markedly. We are in a multipolar world without the assurance provided by unquestioned American dominance. We face a more aggressive Russia and a more assertive China. We simply do not know what the balance of power in the world will be in 25 years’ time.”

He said that in that context, “it is simply not sustainable to expect one Nato ally to spend nearly 4% of its GDP on defence while the others spend between 1 and 2%”.

“I believe it is time for the next strategic defence and security review to ask whether, over the coming decade, we should decisively increase the proportion of GDP we devote to defence,” Hunt said. “Any additional funds would of course need to be for new capabilities and not simply plugging gaps in existing plans.”

UK defence spending is currently 2% of GDP.

Q&A How do the Tories elect a new leader? Show A Conservative leadership contest takes two stages. First, MPs vote for their choice from the nominated candidates. In progressive rounds of voting, candidates are eliminated until there are only two challengers remaining. The second stage is a postal ballot of Conservative party members to chose one of the two candidates. Theresa May's formal resignation as leader on 7 June triggered the contest and the Conservative party set out the following timetable: Nominations closed on 10 June. The first round of voting was held on Thursday 13 June. Subsequent rounds have been pencilled in for the 18th, 19th and 20th. Conservative party HQ says the postal vote element, when the 140,000 or so party members will pick the country's new prime minister, will be completed in the week beginning Monday 22 July.



Hunt, normally seen as a moderniser in the tradition of David Cameron, underlined a commitment to hard power that will please rightwing MPs. He said: “The conflicts of tomorrow could well start with a cyber-attack, then escalate into precision strikes by hypersonic missiles followed by swarms of unmanned aircraft.

“The new domains of space and cyber and the immense capabilities of artificial intelligence will transform the conduct of warfare.”

The consequence of a big defence spend increase “would be a demonstration that Britain stands for the defence of democratic values and second that the UK will never leave its great ally, the United States, to perform this task alone”, he said.

He made no mention in his speech of future defence cooperation with the EU, largely setting the increase in defence spending in the context of Nato.

Hunt’s commitment to a large defence spend as a proportion of overall spending did not, however, lead him to call for the abolition of the 0.7% aid target, saying instead the target was a symbol of the country’s commitment to soft power.

He also argued that a failure to leave the EU cleanly and properly would represent a failure by the British establishment to meet the test set when people voted to leave the EU in 2016.

Hunt said that to fail would be to betray the promise of a democracy, and to betray British values internationally. He also questioned how Britain could “defend democracy on the international stage if a large part of our population believes we are ignoring it at home”.

But he also said Britain’s democracy was frayed and parliamentary democracy needed renewal.

“Despite record low unemployment too many today feel that modern capitalism only works for a privileged few,” he said. “The internet gives people that control over their banking, their holidays, their shopping and their contact with friends. But when it comes to civic decision-making very little has changed.

“People want more power and agency over every aspect of their lives, including the decisions taken by people in authority, as part of a renewal of the social contract between state and citizen.”

Hunt called for Britain to become the centre of the fourth industrial revolution, and the hub for AI technologies.

He sought to appeal to the 48% who voted to remain, and said Britain post Brexit “will never pull up the drawbridge, haul down the shutters or put up a sign saying ‘foreigners not welcome’. We will never stop being open to the world, as we see from our universities where 440,000 international students are enrolled, more than anywhere else bar the United States.”