Well sewage has to be dumped (especially in storm conditions), and the water companies have licences to do so. However Thames was found to be in breach of the license, so were fined.
Many people claim these things happen because "shareholders" however it was completely widespread practice to dump sewage before privatisation and the system is literally designed to do so. This doesn't make it OK, however.
Sewage doesn't have to be dumped. Simply separate your black water and grey water. Storm drains can go to rivers (if the rivers have capacity – if not, it's sometimes easier to give the river more capacity than to build more sewers), and the amount of water in sewage pipes will be independent of the amount of rain.
Sure, the sewers might not currently be designed that way, but that can be changed. (It's a logistical challenge, but it needs to be done.)
Aye, the fact that the WHOLE system would cost trillions to upgrade doesn't stop anyone from upgrading it slowly in this way. The problem will still exist in 50 years, any progress is better than none.
If a sewer system can be designed such that dumping sewage need never occur, you can earmark some of the budget for gradually introducing this property into your sewer system. The more such improvements you make, the less often you'll have to dump sewage, until you never have to. Thames Water could have done this.
Many people claim these things happen because "shareholders" however it was completely widespread practice to dump sewage before privatisation and the system is literally designed to do so. This doesn't make it OK, however.