The European Union could save 2.5 billion euro (£2 billion) if it does not go ahead with a new aid programme, Work and Pensions Minister Mark Hoban says.
Mr Hoban said the new fund for the "most deprived" in Europe will replace the EU's current food distribution programme.
Britain has not contributed to the food handouts scheme since 1998, Mr Hoban said, adding the Government did not wish to make contributions to the new fund, which becomes active in 2014.
He told the Commons that by not going ahead with the project, the EU could save 2.5 billion euro from its forthcoming seven year budget that has been the subject of intense debate in recent weeks.
Mr Hoban said the British Government should be making decisions on its aid programmes and not hand the powers to the European Commission in Brussels.
He told MPs: "The Commission has not provided a convincing justification on the need for EU action. In many ways the new proposal is even more objectionable than the current programme.
"It will be not only be used to provide food aid but also to purchase and distribute basic consumer goods. Whereas the current scheme is optional, the new scheme will be obligatory for member states.
"We believe that member states are capable of taking the type of action to help the most deprived and are not convinced that the European Union is better placed to take such action."
Shadow employment minister Stephen Timms said there was "absolutely no reason" why such support could not be delivered through a national initiative rather than by the EU.
He said: "It is of course the case that setting up a fund at European Union level is quite a costly and bureaucratic thing to do."