Paxton returned from India with a fortune about 1786 and bought an estate in Carmarthenshire.
his politics were moderate and he professed a wish to enlist under your Grace’s banner. He was elected by a majority of 74 votes. The right of election was overturned and he lost his seat, after a serious expense. I was bound by every principle of honour, when my interest in the borough was much more established, to give him the option of standing again.
Dickinson hoped that the Newcastle and Rutland interests would let Paxton in on a compromise in 1796, but they did not and he suffered another defeat.
In Parliament, where he made no particular mark apart from sponsorship of the Carmarthen improvement bill and salmon fisheries preservation in March 1805, he was not recorded as having voted against Addington’s government and went into opposition to Pitt’s second ministry, appearing against the additional force bill in June 1804. In September he was listed a ‘doubtful’ Addingtonian. Further minority votes were recorded against the war with Spain, 12 Feb. 1805, against the suspension of habeas corpus in Ireland, 15 Feb.; and in favour of Windham’s defence motion, 21 Feb. He voted for the censure and criminal prosecution of Melville, 8 Apr., 12 June, and was listed ‘opposition’ in July. He supported Lord Grenville’s administration and in 1806 transferred from the borough to the county seat, without opposition, although he was criticized for his alleged pro-Catholic sympathies by the outgoing Member, Hamlyn Williams. Paxton defended himself by saying that he had voted merely for an inquiry, not for Catholic relief and, as he had no instructions on the subject, had acted as ‘a friend to civil and religious liberty’. He also repudiated a suggestion that he had not opposed the additional duty on farm horses, claiming to have done so ‘at every stage’.
At the ensuing county election, he was again attacked for his Catholic sympathies and declined the contest after three days, complaining of the smear campaign against him and of treachery by an agent. He had never been accepted by the local gentry, who regarded him as an upstart nabob, a ‘Scotch herring’ who was ‘heedless of the interests of our native land’. Out of pique they thwarted his proposal to bridge the Towy at Carmarthen at his own expense. Paxton consoled himself by developing Tenby as a watering place. Nothing came of a rumour that he would contest Pembroke Boroughs on the vacancy of 1809.
Since his return from India he had acted as an East India agent and banker and in 1813 became a partner with his former business associates in India, Sir Charles Cockerell and Henry Trail, in a London bank which went out of business in 1820. He was also a director of the Gas, Light and Coke Company. A letter to Lord Liverpool on his behalf, 7 Dec. 1813, suggested that he had hopes of a baronetcy, but the minister discouraged them. In 1821 Paxton was persuaded to come out of retirement as the Whig candidate for Carmarthen borough on the vacancy caused by Lord Cawdor’s death: his defeat did not come as a surprise. He died in Piccadilly, 10 Feb. 1824, aged 80. His Welsh property was sold and his name is remembered in Carmarthenshire today only by the monument he erected to Lord Nelson, which popular philosophy has renamed ‘Paxton’s Folly’.