Pleasantly mild Liberal embraced by setter? (7)
I believe the answer is:
clement
'pleasantly mild' is the definition.
(as in clement weather)
'liberal embraced by setter?' is the wordplay.
'liberal' becomes 'l' (abbreviation).
'embraced by' is an insertion indicator.
'setter?' becomes 'cement' (something that sets).
'l' put into 'cement' is 'CLEMENT'.
(Other definitions for clement that I've seen before include "gentle approach" , "- - Attlee (PM)" , "mercy" , "Fine" , "nice" .)