Jeremy Corbyn may slowly kill off Labour and help the Liberal Democrats instead

All anyone can talk about this week is Jeremy Corbyn - the radical new leader of the left-wing Labour party - including the party's opposition.

His landslide election, with 59.5% of the leadership vote at the weekend, is a huge deal because his policies hark back to 1970s socialism. He wants to nationalise more companies, abolish austerity spending, and levy more taxes on business. He's also hugely against welfare cuts and is super-supportive of green energy initiatives.

He's undoing years of Blairite policies that saw the the Labour party evolve into "New Labour."

His appointment is causing a huge rift in the Labour party. Eight prominent members of the party stepped down from frontbench roles immediately after his win. Insiders are telling the press about how "disastrous" this is for the Labour party, but the people who voted for him think he'll be able to mobilise greater support from voters that had become disillusioned with politics.

On the flip side, the Conservative-led government are looking rattled by his appointment and Prime Minister David Cameron has taken to social media to claim that the Labour party is a threat to national security.

It looks like Corbyn is a threat to everyone. But not all political party members are worried, given Corbyn's hardline stance on social issues and lack of experience in other areas.

A former Liberal Democrat candidate and employee of an MP spoke to Business Insider. "To put this into perspective: I think a further 15,000 people joined in the 24 hours after the announcement of his victory - The entire #libdemfightback joining figures over three months were the same." The source is still an active member of the Lib Dems.

"All the new members taken together equals a lot of much-needed money and talent. If Labour is savvy about using that it could be powerful. However, there is a concern they will drop off as they are disappointed by the reality of what can be achieved in opposition."

"The massive loss of confidence the party suffered under Nick Clegg's leadership already hemorrhaged a lot of left wing progressive support. In a way we always had to re-demonstrate our purpose to the electorate, whoever the Labour party leader was. I think there is good ground for us to show expertise and core values in areas both the Labour party and Corbyn are weak on: foreign policy, long-term economic policy, electoral reform, and civil liberties."

Clegg stepped down as Liberal Democrat leader after the political party had its worst general election defeat in 45 years. He was replaced by Tim Farron in July.

Farron won with 56.5% of the votes cast. He became famous, like Corbyn, for voting against the party's bedroom tax and tuition fees policies during the Conservative and Lib Dem coalition government.

"Corbyn's style of politics generates noise"

Corbyn's policies come from a hardcore socialist doctrine. My colleague Mike Bird explained here about his policies during his campaign for the leadership:

• Closing the UK's deficit through tax increases, rather than spending cuts.
• A maximum wage for the UK.
• No zero-hours contracts (flexible working agreements without specified weekly hours).
• Strengthening collective bargaining in workplaces.
• A colossal increase in tax revenues by cracking down on avoidance.
• Reinstating the 50% rate of income tax, or going higher.
• "Quantitative easing for people instead of banks," using monetary financing to pay for infrastructure projects.
• Re-nationalisation of major utilities.

A Liberal Democrat spokespeople confirmed to Business Insider today that many of the party's members will address Corbyn's appointment this weekend in Bournemouth for the Liberal Democrats' Autumn conference.

For now, Baroness Sal Brinton, President of the Liberal Democrats, said in a statement sent to Business Insider over email that, much like our source's stance, that the party believes that Corbyn's appointment might be shaking up politics in the short term but not for the future. In fact, she says that the Lib Dems may actually be the beneficiaries of a more engaged political electorate.

"The Corbyn style of politics may generate a lot of noise but only one thing keeps Government in check - credible opposition," said Baroness Brinton. "As Labour abdicates its responsibilities, the Liberal Democrats will offer the serious, responsible and economically-literate alternative this country badly needs.

"We will find common cause with the millions of people who do not support this Government and need a party to represent them. We are the only party which can stand up to the Tory assault on the welfare state without resorting to pie-in-the-sky economics."

"Corbyn is not progressive enough"

Many of Corbyn's social and economics policies look a lot like Lib Dem ones, but on steroids.

For example, the Lib Dems have spoken out regularly about closing the poverty gap between the lowest earners to the wealthiest company board members. The party has pushed for greater wages for the poorest people in society and tried to lift the tax allowance.

One of the highest profile Lib Dems, former business secretary Vince Cable, had regularly worked on making sure pay at company board level was more fair and inline with company performance.

However, Corbyn goes further and wants to install a maximum wage bracket - clearly only penalising white-collar workers at executive level.

When Business Insider asked our former Liberal Democrat candidate source about whether Corbyn's hardline policies will eventually bleed Labour support and help people go back to the Lib Dems, the source said, "in a nutshell; yes."

"I admire his honesty and consistency but some of his positions will be unpalatable to sections of the electorate who are progressive or socially liberal but not socialist in terms of where they think the balance of power should lie between the government and themselves," said the source.

"Liberal Democrats on the whole think people know what is best for them, and should try and put in place the means for people to run their own lives rather than put in place what is best from the government's perspective."