A year ago David Cameron made what was then and is still now the most important speech of his premiership. In January 2013 he went to Bloomberg's offices in the City of London and spoke about Britain's relationship with Europe. The speech said lots of practical things about the European Union, including the prime minister's "heart and soul" wish for the UK to remain in a reformed Europe. But its key political line was the commitment, if re-elected, to hold a referendum on EU membership by the end of 2017.

The speech mattered for two powerful reasons. First, because it was a large strategic statement from the top of the government about this country's key international and trading relationship at a time of deep European economic crisis. And second, because it was supposed to put the Tory party's internal argument over Europe to bed until the 2015 general election.

It is important to remember the context in which the speech was made, as such things matter and are too easily forgotten. Cameron had had a bad 2012. The economy was bumping along the bottom. The budget had imploded. The coalition was in trouble over Lords reform. Tory backbench anger against Cameron was rising. The Corby byelection had been lost. Ukip was polling strongly. The eurozone was in a mess. This Europe speech took place after an interminable build-up. It was designed to reset the dials on Britain in Europe and on Cameron's party management.

It is also worth remembering that, in general, the speech was an instant hit, especially in Cameron's own party. Tory backbenchers rose and cheered him when he arrived in the Commons. The party chairman Grant Shapps said the speech had united the party. The threat to Cameron seemed to fall away, and despite some occasional excitement, it has not returned since. In the weeks after the speech, the Tory backbenches were more obliging to Cameron. On Europe, it was Labour who came under pressure to replicate the rival stance.

Yet as time has passed it has grown ever clearer that the speech was not the triumph it was briefly advertised and perceived as being. Instead it was a failure, perhaps even a career-defining failure, and undoubtedly the mark of a weak prime minister.

Again, there are two main frames for examining this failure. The first is that it has not reshaped the EU's debate about itself in any way. Though Cameron still claims, and George Osborne again asserted today, that Britain is working successfully with like-minded countries to achieve its EU reform agenda, there is not a lot of evidence to support them.

The cut in the EU budget last year was Germany's work more than Britain's. And there has been little progress on any of the big internal issues facing the single market, such as the digital economy, energy or services. Above all, none of the other 28 EU members need to make any move on the treaty changes for which Osborne claimed to have support in his speech. That's because there is no point taking the UK's wish to renegotiate seriously unless and until Cameron wins in 2015.

David Cameron delivering his EU speech on 23 January 2013. Photograph: Facundo Arrizabalaga/EPA

But the bigger issue is the Tory party. Here it is clear that the referendum pledge has had no effect at all in strengthening Cameron's long-term position. If the aims of the speech were to unify the party, park the Europe issue and stop Ukip in its tracks, it has been a failure on each count.

Parts of the party are louder than ever in their anti-Europeanism, not quieter. The issue has not gone away – hence Osborne's speech this week. And Ukip is stronger not weaker. I asked Nigel Farage today where he would put Tory anxiety levels over Ukip on a scale of one to 10 a year ago and today. About six a year ago, today nearer eight, he replied. And you watch the dial climb later this year, he then added.

The reality is that Cameron's Bloomberg speech settled nothing. The referendum pledge that was supposed to be a final settling of Tory accounts on Europe in this parliament has proved to be nothing of the sort. The Eurosceptic beast's appetite knows no limits. A mere four months after the speech, 114 Tory backbenchers rebelled to demand the referendum pledge in law. Then the government folded, throwing its weight behind James Wharton's private members' bill enshrining such a commitment.

Now about 100 Conservative backbenchers are demanding a UK parliamentary veto over European laws. Meanwhile, the once vaunted "competence reviews" on the balance between EU and UK powers have been marginalised, as the one on the single market returned a more favourable conclusion than the Tory backbenches wished to see. Or they have been postponed until after the European elections in May – as in the case of the review of freedom of movement – lest they offend the Eurosceptics.

A year ago, Cameron could have put himself at the head of a broad-based pro-reform, pro-European campaign in British politics. It could have had widespread support across all parties and could have made a difference in Europe and in Britain alike. Not surprisingly, polls show that a majority of voters would support such an approach if it was on offer. They want a Europe that works, in which Britain has influence.

Instead, Cameron put his role as Tory leader above his role as prime minister. He preferred to bend the knee to the impossibilist demands of the anti-European right and the Tory media. He has continued to do so ever since and, if Ukip scores heavily in May, will surely do so again, and fail to achieve the success he seeks. It is a disaster for the Tory party. But it is a tragedy for the country.