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.