At the risk of sounding po-faced, the trouble with this sort of thing is that as long as people are working for £7 an hour (well below the minimum wage) they are forcing down the pay of everyone else doing low-skilled work. Not only that, but the cleaner will not be eligible for any benefits (including sick pay, maternity pay and pension) as she won't be paying NI. This might not seem to matter now, but what is she supposed to do if she takes ill, or gets pregnant? How many people on here wish that they had more pension contributions? It is really unfair to force people into a situation where they are storing up trouble down the line, but as long as there are cleaners (and others) working for low pay it will be more difficult for others to charge enough to pay their contributions.
When people collude in defrauding the system that the rest of us pay into, they are also short-changing people like the cleaner, who is operating outside of the economy, whether she likes it or not. Turning a blind eye to non-payment of contributions is not doing her a favour at all, however much people pretend it is 'none of their business'.
It is actually the employer's responsibility to pay the tax and NI, although few people employing cleaners on a cash basis do this.