Labour had the most seats in the 1929 election - but it was a hung parliament and had to rely on the Liberals to get anything done.
The Labour leadership of the early '30's also had no ideas or short term plans for anything.
You also had the ghastly influence of arch-Gladstonian Snowden as Chancellor...
The split resulted in MacDonald, Snowden et al
and all Liberals who weren't personal friends of Lloyd George (that bit generally gets forgotten) essentially joining the Tories. IMO the defeat of Labour in '31 wasn't a backlash against the Depression (after all, MacDonald and Snowden were very much in bed with the Tories that election) so much as a huge anti-Left backlash (and as such, maybe a little comparable with the rise of fascism in other European countries...).
Basically, Labour was left with only it's core coalfield constituencies (including the old Spennymoor seat
) after that election.
For most of the U.K, the Depression was actually worse in the late '30's than the early '30's (o/c the coalfields had been in their own personal economic hell since the return to the Gold Standard in the '20's. One reason why I've always hated Churchill actually). It's telling that Labour did very well (better than in the '20's in some areas IIRC) in the Pennine (ie; small town) textile constituencies that year.
More like 1943 actually; in the aftermath of the publication of the Beveridge Report, people swung strongly towards Labour.