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1830 he brought in a bill for improving the administration of justice (Parl. Debates, 2nd ser. xxiii. 53–62, 68–9, 70), which received the royal assent on 23 July 1830. By this act the separate jurisdiction for the county palatine of Chester and the principality of Wales was abolished, and provision was made for the appointment of three additional judges. At the same time the court of exchequer was thrown open to general practice, and fixed days were appointed for the commencement and close of terms (11 Geo. IV and 1 Will. IV, cap. 70). On 9 July he moved the third reading of the Libel Law Amendment Bill (Parl. Debates, 2nd ser. xxv. 1132–44), which also became law this session. By it the punishment of banishment was repealed and the amount of the bonds to be given by publishers of newspapers increased (11 Geo. IV and 1 Will. IV, cap. 73). At Lord Fitzwilliam's request Scarlett retired from the representation of Peterborough at the dissolution of parliament in July 1830, and became a candidate for the borough of Malton, for which he was duly returned at the general election in the following month. On the Duke of Wellington's downfall in November 1830 Scarlett resigned his office. He appears to have thought himself badly treated by the new ministry, and was much annoyed at the appointment of Lord Lyndhurst to the exchequer in January 1831. He had never been a very ardent reformer, and after some hesitation he made up his mind to oppose the Reform Bill. On 22 March 1831 he spoke against the second reading and declared his conviction that if the bill passed it would ‘begin by destroying the House and end in destroying the other branches of the constitution’ (Parl. Debates, 3rd ser. iii. 771–792). A few days afterwards he accepted the Chiltern Hundreds (Journals of the House of Commons, vol. lxxxvi. pt. i. p. 470). He now cast in his lot with the tories, and at the general election in April was returned for Lord Lonsdale's borough of Cockermouth. On 19 Sept. 1831 he protested strongly against the third reading of the second Reform Bill, and warned the house that ‘they might soon expect that the Corn Laws would be repealed and that the first blow to all property, the confiscation of the property of the church, would soon be given’ (Parl. Debates, 3rd ser. vi. 151–66). At the general election in December 1832 Scarlett and Lord Stormont stood for Norwich in the tory interest, and were returned at the head of the poll. The return was petitioned against, but the committee, not admitting the proof of agency, declared them to be duly elected, and Scarlett continued to sit for Norwich until the dissolution of parliament.

He was appointed lord chief baron of the exchequer on 24 Dec. 1834 in the place of Lord Lyndhurst, who had been raised to the woolsack for the second time. Previously to his appointment to the exchequer, Scarlett was sworn a member of the privy council (15 Dec.) and made a serjeant-at-law (24 Dec.). He was created Baron Abinger of Abinger in the county of Surrey, and of the city of Norwich on 12 Jan. 1835, and took his seat in the House of Lords for the first time on 20 Feb. following (Journals of the House of Lords, lxvii. 6–7). In the same year he was created an LL.D. of Cambridge. He took but little part in the debates of the upper house. He expressed his opinion that ‘a system of national education must inevitably fail’ (Parl. Debates, 3rd ser. xlvii. 764), and declared that ‘he should oppose with his utmost force the abolition of the equity side of the exchequer’ (ib. liii. 1362). On 21 Feb. 1843 Duncombe called the attention of the House of Commons to the ‘partial, unconstitutional, and oppressive’ conduct of Abinger while presiding over the special commission issued for Lancashire and Cheshire. The language used by Abinger in his charges to the grand juries on this occasion was undoubtedly indiscreet, but his conduct in other respects was free from reproach, and the motion for an inquiry was defeated by 228 votes to 73 (ib. lxvi. 1037–1143). Abinger presided in the exchequer court for rather more than nine years, and attended the Norfolk circuit in the spring of 1844, apparently strong and well. But after doing his work in court at Bury St. Edmunds on 2 April with his usual clearness and skill, he was suddenly seized with apoplexy. He never spoke again, and died at his lodgings in Bury on 7 April 1844, aged seventy-four. He was buried in the family vault in Abinger churchyard on the 14th of the same month.

Scarlett married first, on 22 Aug. 1792, Louise Henrietta, third daughter of Peter Campbell of Kilmory, Argyllshire, by whom he had three sons, viz. (1) Robert Scarlett, born on 5 Sept. 1794, who succeeded as second baron Abinger and died, leaving issue, on 24 June 1861; (2) Sir James Yorke Scarlett [q. v.]; (3) Peter Campbell Scarlett [q. v.]; and two daughters: (1) Mary Elizabeth Scarlett, who became the wife of John (afterwards Baron) Campbell on 8 Sept. 1821, was created Baroness Stratheden of Cupar, Fifeshire, on 22 Jan. 1836, and died on 25 March 1860; and (2) Louise Lawrence Scarlett, who married Lieut.-colonel Sir Edmund Currey, K.C.H., on 14 June 1828, and died on 26 Oct.