Can a British please explain to me their conception of "liberal" and how the Liberal Democrats fit in?

I’m speaking of the Liberal Democrats in Britain. There is the Conservative party, which is currently in power, there is the Labour party headed by Corbyn, and the Liberal Democrats headed by Cable. I’m very familiar with the concept of European classical liberalism which some in the US would consider conservative.

So my question is more for British politics. The Labour party is the party of the left, the Conservative party is the party of the right—although it’s not as “right” as the US. How do the Liberal Democrats fit in? How are their political views different than Labour and Conservative?

I have read quite a bit on this and am somewhat familiar with the issue, but I am curious about the opinions of the British on Fluther. Thank you!