It's AC so all you have to do is make a transformer with three windings, one for each of the power wires and one for sensing. If the current in the two power carrying wires is identical, and the transformer windings are the same but reversed, the resulting magnetic fields cancel out. With no magnetic field, the sense winding has no voltage induced into it. If there is an imbalance, the fields are not fully cancelled and the sense winding picks up a voltage.
If you connect Earth to Neutral, there will be a current difference between the live and neutral so the trip should operate. There are some special circumstances where E-N are bonded together but it will not normally be at your end of the cables.
Almost all power cables use PVC insulation. It is cheap, stable and can easily be colored for identification. A good PVC coated cable should be good for 60+ years.
Polyvinyl chloride, more correctly but unusually poly(vinyl chloride), commonly abbreviated PVC, is the third-most widely produced synthetic plastic polymer, after polyethylene and polypropylene. PVC comes in two basic forms: rigid (sometimes abbreviated as RPVC) and flexible.
You are jumping from one topic to another again - be careful!
This thread started asking about electricity bills and now you are asking about the history of plastics.