The first sentence is correct - "English people are polite" . When you are talking about a thing - or a category of things or people - in general terms, you don't use 'the'. It's the same as saying 'Red apples are tasty' - you don't need an article because you are referring to red apples in general. You would use the article 'the' only if you were talking about a particular group of English people. For example, you might say 'The English people who are staying at our hotel are polite.' Here, you use 'the' because you are describing specific English people, as opposed to English people in general.

The first one is correct. No "the" is needed. "English people" is considered to be a large enough group that it is indeterminate and so does not need "the" - it is "all English people. "The English people who I know" is considered to be a defined group of English people and so needs "the". There are a large number of rules on the use of articles in English. They are well summarised on www.englishpage,com in the "Articles Tutorial".