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David Cameron, Boris Johnson and Nick Clegg have all admitted that they have made cash-in-hand payments to tradesmen to run essential state services such as hospitals, schools and military installations.

The admissions come after Tory treasury minister David Gauke said on Monday it was “morally wrong” to pay people like Polish plumbers cash in hand to run the country because it denied the treasury vital funds in taxes.

But other ministers took a different view. A No 10 source said that Cameron wasn’t certain but thinks it is likely he once made payments in cash to a Polish man called Ziggy Kowalski to take over the running of some children’s hospitals in Sussex. However, he didn’t do it to help Mr Kowalski evade tax.

The source said:

The prime minister has never paid anyone in cash to get a discount. He may have paid a couple of tradesmen he got from the Yellow Pages to run some minor things like the Metropolitan Police or something. But there is also categorically no truth in the rumour that G4S was paid its £280 million Olympic fee in cash to get a discount. Obviously everyone knows we were massively overcharged so clearly they didn’t give us any kind of a discount at all.

The Deputy Prime Minister, Nick Clegg told Channel 4 News:

I can’t remember off the top of my head whether I paid someone cash to run the NHS or not. I’m sure I paid some Chinese guys cash-in-hand to put up a couple of nuclear power stations somewhere, but I certainly have never paid anyone cash in hand knowing that is done in order to avoid tax. That would be entirely wrong.

Boris Johnson, the London Mayor said “of course” he had made payments in cash. Asked by ITV News whether he had ever paid anyone cash in hand, Johnson said:

Of course there’s nothing wrong with paying people cash-in-hand to do little jobs like running hospitals or schools. I do it all the time and there’s absolutely nothing wrong with it at all. What is wrong is if people do it knowing that this is a way to avoid tax rather than paying it back to us in party donations. That is wrong. Everyone should be absolutely open and honest about ripping off the taxpayer.

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